Beijing's Pledge to Stabilize Markets Falls Short Lacking Fresh Stimulus

China and Hong Kong stocks remained stagnant as Beijing promised to stabilize capital markets but didn't announce new measures to counter U.S. tariffs. The market rally, driven by state-backed buying, is losing momentum amid uncertainty about Sino-U.S. trade talks and potential policy support.

On Monday, China and Hong Kong stocks showed little movement despite Beijing's assurance to stabilize capital markets, as additional measures to counter rising U.S. tariffs were absent.

The Chinese market has experienced an 8% rebound, fueled largely by state-backed buying since early April, following U.S. President Donald Trump's 'reciprocal tariffs' which negatively impacted global shares. Yet, this rally is waning without further backing from Beijing or clarity on Sino-U.S. trade negotiations yielding a resolution.

China's top policymakers pledged support for firms and workers affected by high U.S. tariffs but did not announce new stabilization measures, leaving both China's blue-chip and Hong Kong indices relatively flat. Meanwhile, U.S. Treasury Secretary Scott Bessent noted uncertainty surrounding any tariff talks with China, adding another layer of complexity to the economic landscape.

(With inputs from agencies.)