Foreigners flee Chinese stocks at record speed as spreads panic

(Bloomberg) – Foreign investors are on track to turn to selling Chinese stocks for the first time this year, as concerns over the lack of supportive policies from the Party Congress and a new market fueled Covid Zero.

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Foreign investors sold a record 17.9 billion yuan ($2.5 billion) in mainland stocks through trading links with Hong Kong on Monday, according to Bloomberg data. Bloomberg data. If that lasts until the end of the year, it will be the first annual drop since the stock connect program was launched in 2014.

Read: Xi’s Power Embrace Spurs’ historic market as foreigners flee

Panic-selling activity rocked markets on Monday following the nation’s two-decade-long political fray, with the Hang Seng China Enterprise Index falling to its lowest level since the financial crisis. 2008. The consolidation of power by President Xi Jinping is seen as a major risk, with expectations that the leadership reshuffle will bring about the continuation of important policies like Covid Zero.

“Foreign sentiment towards Chinese stocks is at a low point” as the party congress signaled no imminent changes to its policies, said Marvin Chen, an analyst with Bloomberg Intelligence. Covid. “Markets may need to wait until near the Central Economic Work Conference in December to see how the new leadership will address China’s economic challenges.”

The Chinese bears are growing day by day as traders turn skeptical about the country’s economic growth prospects hampered by Covid Zero and the heavily battered real estate sector. The benchmark CSI 300 index fell 2.9% on Monday amid a broader sell-off even though the country posted better-than-expected third-quarter gross domestic product data.

Investors are now considering whether new management can provide much-needed stimulus to stem further losses. Two economic meetings later this year – the Politburo meeting and the Central Economic Work Conference – will be closely watched for such policies.

–With support from April Ma.

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