11 March 2024 , 15:43
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Chinese stocks finished Monday on a high note as the country's national parliament wrapped up its annual meeting.
The Hang Seng Index, led by the tech sector, rose 1.3% to 16,570.86. Big winners included JD.com, which leapt 6.6% to 98.75 Hong Kong dollars, and e-commerce giant Alibaba Group Holding, which saw a 2% gain. Tencent also climbed 3.2%. In other parts of China, the Shanghai Composite Index had a mixed day, with small gains and losses throughout the morning.
It ended the trading day at 3,068.46, marking a 0.7% increase. The smaller Shenzhen market rose by 2.3%. China's consumer price index (CPI) bounced back by 0.7% in February, hitting an 11-month high. This was driven by a surge in spending over the holiday season, according to data from China's statistics bureau.
On the other hand, the producer price index, which tracks changes in the prices domestic producers receive for their output, fell by 2.7% year-on-year. This continues a downward trend that has lasted for 17 straight months.
Stephen Innes of SPI Asset Management noted that deflation remains a significant concern for investors when it comes to China's economic landscape. He suggested that, in addition to increased government spending, the economy needs structural reforms to encourage citizens to spend rather than save.
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Electric vehicle stocks are performing strongly after a report from China said that more electric cars are being made and sold than last year. The number of electric cars on the market is now 30%. The car company NIO saw its shares go up by 4.1%, and another big company, BYD, had its shares jump by 4.7%.
But shares in property companies didn't do so well. This is because the government said that property developers might not get the package of support they hoped for to help ease a tough economic landscape for the sector. The construction sector accounts for a sizable part of the Chinese economy. The Evergrande Group, a huge property company, had to shut down in January.
During the National People's Congress annual meeting last week, Prime Minister Li Qiang set an ambitious growth target of 5%, despite recognising the challenging times ahead. Experts voiced their doubts about whether China's economic bounce-back can last, pinpointing deep-seated issues that demand long-haul solutions.