During the recent government work report readout attended by 5,100 delegates from the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC) in Beijing, several key points were highlighted.
Economic Measures and Challenges
One of the notable aspects was the announcement of a 3% budget deficit, which received mixed reactions from investors. Premier Li acknowledged the challenges facing China's economy in his speech, emphasizing the need for supportive policies to address these issues.
National Economic and Social Development Plan
The National Development and Reform Commission (NDRC) released the draft of the 2024 National Economic and Social Development Plan, focusing on the prevention of major economic and financial risks, stable real estate market development, and technological innovation in the industrial sector.
Market Performance
Following the government work report, Asian equities experienced varied performance. Mainland China saw positive movements driven by large-cap stocks, while Hong Kong faced a lower opening. Notably, Mainland investors engaged in significant net buying via the Southbound Stock Connect.
Stock Market Analysis
The Hang Seng and Hang Seng Tech indexes experienced declines, with a notable increase in short turnover. Various sectors, including Health Care, Consumer Discretionary, and Communication Services, witnessed negative movements. On the other hand, Shanghai, Shenzhen, and the STAR Board showed mixed results, with Utilities, Consumer Staples, and Financials performing relatively well.
Foreign Investment and Currency
Foreign investors bought a net $215 million worth of Mainland stocks through the Northbound Stock Connect. The Chinese Yuan remained stable against the US dollar, while Treasury bonds rallied. In the commodity market, copper prices rose, while steel prices fell.
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