China's Stocks Struggle Amid Deflationary Pressures and Stimulus Efforts
China stocks fell on Thursday due to persistent deflationary pressures despite new government stimulus efforts aimed at boosting consumption. While China's blue-chip CSI300 Index and the Shanghai Composite Index slipped, Hong Kong shares remained steady. Domestic investors seek overseas assets, and tech shares rise amid geopolitical tensions.

- Country:
- China
On Thursday, China's stock markets saw a dip as deflationary pressures persisted despite government efforts to stimulate consumption. The blue-chip CSI300 Index fell by 0.1% while the Shanghai Composite Index declined by 0.3%. Hong Kong's Hang Seng Index, however, showed modest gains, increasing by 0.1%.
Consumer prices in China barely rose in 2024, and factory-gate prices continued their decline for a second consecutive year as revealed by the latest official data. The government had just expanded its household consumer trade-in scheme, yet its impact was limited as per the reaction of the Chinese consumer stocks index.
As domestic investors increasingly look to international assets via cross-border channels, tech shares gained momentum. Geopolitical tensions stirred renewed focus on chip-making and information security stocks, while Hong Kong's tech index climbed, notably with Tencent's recovery after U.S. Defense Department scrutiny.
(With inputs from agencies.)
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