Chinese Stocks Erase March Gains as Policy-Driven Rally Falters

"Chinese stocks wipe out gains from March as a policy-driven rally loses momentum. This development underscores the volatility and influence of government policies on the country's stock market. Stay updated as China's financial landscape continues to evolve amid shifting regulatory dynamics."

Chinese stocks erased their gains for March as earnings disappointments eroded optimism around a policy-driven rally that began in February.

The onshore benchmark CSI 300 Index slipped 1.2% Wednesday, closing below the level set on the last trading day in February. Similarly, a broad gauge of Shanghai-listed stocks dropped below the key threshold of 3,000 points for the first time since late February.

The declines came as overseas investors sold a net 7.2 billion yuan ($996 million) of mainland shares via trading links with Hong Kong Wednesday, the biggest one-day outflow in more than two months. Disappointing earnings from companies such as Wuxi Biologics Cayman Inc. and China Mengniu Dairy Co. also hurt investor sentiment.

“We stay relatively cautious on earnings recovery for Chinese equities through 1Q24 at least,” Morgan Stanley analyst Laura Wang wrote in a research note. “Downward earnings revisions could last well through late April.”

Sourced from Bloomberg