Benzinga - by Neil Dennis, Benzinga Staff Writer.
Chinese stocks fell sharply on Tuesday, led by a fragile-looking real estate sector, following data that showed continuing weakness in the country’s property market.
The Hang Seng Index in Hong Kong fell 1.6% on Tuesday. The iShares MSCI China ETF (NYSE:MCHI), an exchange traded fund that tracks some of China’s biggest stocks, was down 1.8% in pre-market trading in New York, despite having little exposure to the property sector.
Among the major decliners on the Hang Seng Index were Longfor Properties, down 7%, and China Resources Land, which fell 5.4%. Data on the performance of American depository receipts in Longfor Group Holdings ADR (OTCPK:LGFRY) and China Resources Land ADR (OTCPK:CRBJY) were delayed ahead of the market open in New York.
Also Read: ‘Rapid Descent’: Mortgage Rates Are Shocking Experts. Is US Housing Getting More Affordable?
Property Supply Remains High, Demand Low
The researchers said: “The supply capacity and willingness of real estate enterprises are insufficient, and the approved listing area of commercial housing in 50 representative cities has decreased by more than 10% year-on-year.”
“Both sides of the market supply and demand weakened, the saleable area fell back but remained at a high level, and the clearance period was extended to 19.6 months. The year-on-year decline in the area of new housing starts is still large, and the year-on-year decline in the construction area continues,” the researchers added.
Weakening Manufacturing
This contrasted, however, with PMI data from Caixin Bank, which showed the index inched up from 50.7 in November to 50.8 in December. A PMI reading below 50 indicates economic contraction.
Caixin noted, however, that employment declined significantly, while market optimism weakened on lower expectations for future output.
“Factors such as consumer budget constraints, intense market competition and uncertain global economic prospects continued to be the primary concerns for manufacturers,” said Dr. Wang Zhe, senior economist at Caixin.
China Yuan Falls
Chinese yuanThe yuan fell by 0.6% against the dollar ($CNY) on Tuesday, following a strong run against the greenback in the last two months of 2023. However, the dollar remained up around 3.4% over the past year.
Now Read: Forget The Magnificent 7: Did Anyone Back These 1,000% Gainers In 2023?
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.