AsianFin -- Chinese stocks are on track for their worst start to the year in nearly a decade, as investors brace for economic uncertainties. Weak manufacturing data and the expectation of tariff hikes have fueled cautious sentiment.
The CSI 300 Index dropped more than 3% in afternoon trading, and if the losses persist, it will mark the steepest decline on the year's first day since 2016. The Hang Seng China Enterprises Index fell 3.1% before partially recovering.
This downturn follows Chinese equities' first annual gain since 2020. Investors are citing several factors, including a Caixin manufacturing survey that came in below expectations. A sharp drop in the CSI 300 during the last trading session of 2024 also pushed the index below a critical technical threshold, prompting further selling by some funds.
Additionally, several major financial stocks, including Industrial and Commercial Bank of China and Agricultural Bank of China, were trading ex-dividend, intensifying the benchmark's losses.
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