China's Stock Slump: Economic Woes and Policy Expectations

China's stocks declined for the second consecutive week, with the Shanghai Composite and CSI 300 indices recording losses. Investors awaited Beijing's economic policy adjustments amid persistent deflationary pressure and weak economic fundamentals. The energy sector led declines, but tech shares gained due to U.S. developments.

China's stock market experienced another week of decline as economic concerns overshadowed investors' confidence. The Shanghai Composite index fell by 0.06% to close at 3,368.07, while the blue-chip CSI 300 index lost 0.45%, marking a consecutive week of losses for these benchmarks.

Leading the downturn, energy shares slid after Sinopec projected China's oil consumption would peak by 2027. While sectors like consumer staples and healthcare also suffered, technology stocks showed resilience, boosted by reports involving U.S. regulatory developments and Nvidia's dealings.

Despite these challenges, the CSI 300 index has risen 16% this year, aiming to break a multi-year losing streak. Investors anticipate more policy interventions from Beijing to address economic fundamentals and boost market confidence, with the 2025 fiscal budget outlook presenting a more positive scenario.

(With inputs from agencies.)