---
title: "Chinese stock rally loses steam, Asian peers fall: markets wrap"
description: "China’s world-beating equity rally lost momentum after a key briefing expected to unveil economic stimulus measures underwhelmed investors. Hong Kong shares plunged and the yen gained."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-10-08-chinese-stock-rally-loses-steam-asian-peers-fall-markets-wrap/"
published: "2024-10-08T05:40:37"
updated: "2024-10-08T05:43:13"
lang: "en-ZA"
word_count: 622
---

# Chinese stock rally loses steam, Asian peers fall: markets wrap

> China’s world-beating equity rally lost momentum after a key briefing expected to unveil economic stimulus measures underwhelmed investors. Hong Kong shares plunged and the yen gained.

By Bloomberg · Published 8 October 2024, 07:40 SAST · Updated 8 October 2024, 07:43 SAST

## Content

The benchmark CSI 300 pared its 11% gain at the open to 2% in an hour after trading began after a weeklong holiday. A gauge of Chinese stocks in Hong Kong had their worst intraday tumble since 2008. Broader Asian equities dropped after Wall Street was dragged down by a tech selloff, geopolitical angst and bets on a smaller Federal Reserve rate cut. MSCI’s Asia-Pacific share gauge dropped the most in a month.

[A briefing](https://www.bloomberg.com/news/articles/2024-10-07/china-economic-agency-plans-briefing-as-investors-eye-stimulus) by China’s top economic planner failed to deliver more stimulus measures after earlier policy announcements before the Golden Week holiday break sent shares in China and Hong Kong surging. From JPMorgan Asset Management to HSBC Global Private Banking, numerous investors questioned the sustenance of that rally.

“While the policy tone is still certainly indicating a supportive tone, the limited new measures appear to be disappointing markets for now,” said Lynn Song, Greater China chief economist at ING Bank NV. “Moving forward, the market trend will likely depend on the speed and strength of further policy follow-up from other ministries.”

At the briefing by the National Development and Reform Commission, Chinese officials said they were confident of reaching its economic targets this year and promised further support for growth, although they held back from unleashing more stimulus. They said that China would continue to issue ultra-long sovereign bonds next year to support major projects and invest 100 billion yuan ($14-billion) on key strategic areas.

“I wouldn’t be surprised if we see bigger volatility around events like the NDRC now, because expectations have been raised,” said Phillip Wool, head of portfolio management at Rayliant Global Advisors. “I do believe policymakers are taking a different tack now, and that’s our focus for the medium- to longer-term.”

There’s some convergence in the markets with investors rotating money from Hong Kong to China, benefiting mainland shares, said Marvin Chen, a Bloomberg Intelligence strategist.

Invesco Ltd. and Nomura Holdings Inc. are also among those viewing the recent [rebound with skepticism](https://www.bloomberg.com/news/articles/2024-10-06/china-stock-skepticism-gets-louder-as-world-beating-run-extends) and waiting for Beijing to back up its stimulus pledges with real money.

An overheating of the A-share market and the Chinese government’s delivery on its recently announced policy stimulus are among the risks investors should watch amid the Chinese stock market rally, according to Morgan Stanley.

The S&P 500 fell 1% on Monday after notching a four-week winning run. In the wake of Friday’s solid jobs data, Treasuries continued to drop — with the 10-year yield topping 4%. [Brent crude](https://www.bloomberg.com/news/articles/2024-10-06/latest-oil-market-news-and-analysis-for-oct-7) jumped above $80 a barrel in overnight trading amid mounting tensions in the Middle East.

“Friday’s strong jobs report not only appeared to kill any chance of a 50-basis-point rate cut in November, it kickstarted chatter about the Fed leaving rates unchanged if economic data continues to come in hotter than expected,” said Chris Larkin at E\*Trade from Morgan Stanley. “But as last week showed, geopolitics can’t be ignored.”

The crisis in the Middle East continues to unnerve investors, with [fighting escalating](https://www.bloomberg.com/news/articles/2024-10-07/israel-says-it-intercepted-hamas-rockets-as-war-marks-one-year) on Monday on multiple fronts after a year of war. The Israel Defense Forces said it intercepted most of a barrage of rockets fired toward Tel Aviv by Hamas and other Iran-backed groups. Brent crude soared to its highest price since August as [speculation increased](https://www.bloomberg.com/news/articles/2024-10-06/latest-oil-market-news-and-analysis-for-oct-7) that Israel may attack Iran’s oil infrastructure. West Texas Intermediate crude rose early Tuesday.

To Dave Sekera at Morningstar, if there is any further geopolitical escalation, that would potentially spur the risk-off trade — with growth shares underperforming value ones.

“Typically, in a risk-off trade, you’re going to see rotation into defence stocks, but I’d be careful if you’re an investor today,” he said. “Some of the defensive sectors today are already overvalued. Unlike a typical risk-off trade, I think oil stocks would go up.”