Chinese Stock Market Declines Despite Real Estate Stimulus Announcement... Shanghai Down 1%

China and Hong Kong Real Estate Indexes Plunge Around 7%

China's stock market closed lower on the 17th despite the Chinese authorities' announcement of real estate measures.

Chinese stock market.
Photo by Yonhap News

The Shanghai Composite Index fluctuated after the real estate policy press conference in the morning and closed at 3,169.38, down 33.56 points (1.05%) from the previous day.

The Shenzhen Composite Index also closed down 10.27 points (0.56%) at 1,831.89.

The CSI 300 Index, composed of the top 300 stocks by market capitalization on the Shanghai and Shenzhen exchanges, also ended with a decline of 1.13%.

The Hong Kong Hang Seng Index closed down 1.20%.

In particular, the real estate indices in mainland China and Hong Kong fell by 7.9% and 6.7%, respectively. Reuters analyzed that the real estate support measures announced by Chinese authorities, which include injecting an additional KRW 340 trillion into 'whitelist' loans to support real estate companies facing liquidity issues within this year, fell short of market expectations, leading to a significant decline in real estate stocks.

Reuters evaluated that there were no new measures in the press conference by Ni Hong, Minister of China's Ministry of Housing and Urban-Rural Development, that would excite the market.

On the same day, a plan to renovate an additional one million old houses was also announced. After the press conference, when reporters asked about the scale of funds required for this, Minister Ni only said "there is an estimate" but did not disclose specific figures, according to the Hong Kong South China Morning Post (SCMP).

Analysts from Shanghai Soshupa Investment Management, a Chinese asset management firm, told Reuters, "The plan to renovate an additional one million houses itself falls short of expectations and is far behind the 18 million shantytown renovation plan announced by China in 2015."