China, Hong Kong stocks tread water as investors await policy cues

China and Hong Kong shares were little changed on Thursday, with investors awaiting policy guidance from a key meeting later this month. China's blue-chip CSI300 index was up 0.3%. ** Analysts at Citi said they expect "few surprises" in economic data or policy impact towards the year end, adding they'll be watching the Central Economic Work Conference later this month for guidance.

China and Hong Kong shares were little changed on Thursday, with investors awaiting policy guidance from a key meeting later this month. ** The Shanghai Composite Index lost as much as 0.5% to a one-week low, before trading largely flat as of the midday break. China's blue-chip CSI300 index was up 0.3%.

** Analysts at Citi said they expect "few surprises" in economic data or policy impact towards the year end, adding they'll be watching the Central Economic Work Conference later this month for guidance. ** China is likely to stick to its current annual economic growth target of around 5% in 2026 as top leaders to meet soon to chart the economic course for next year, a goal that would require authorities to keep fiscal and monetary spigots open as they seek to snap a deflationary spell.

** Sector performance was mixed. Weighing on the markets on Thursday, the CSI Liquor Index was down nearly 2% and the consumer staple sector weakened 0.8%. ** Property-related shares extended the decline with the CSI 300 Real Estate Index weakening 0.1%, as sentiment remained subdued amid Vanke's liquidity struggle.

** Leading the markets higher, the CSI Semiconductor Index rallied 2.6% and the robotics index jumped 2.3%. The artificial intelligence index was up 0.2%. ** In Hong Kong, the benchmark Hang Seng Index was up 0.2% at 25,809.45, and the Chinese H-share index listed in the city, the Hang Seng China Enterprises Index rose 0.4%.

** Despite the weakness seen this week, downside surprises should be limited toward the year end, with another Federal Reserve rate cut potentially supporting global liquidity conditions, which would provide a leg up for domestic sentiment as well, analysts at Pacific Securities wrote in a note. ** "We think investors should keep a long bias and waiting for risk appetite to return," they added.

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