Chinese shares post first annual gain since 2020, Hong Kong ends four-year streak Reuters
Author: Jiaxing Li
HONG KONG (Reuters) – Chinese stocks posted their first annual gain after an unprecedented three-year slump despite falling on the last day of trading in 2024, while shares in Hong Kong ended the year higher, buoyed by optimism over policy support.
The blue-chip CSI 300, which tracks the largest companies listed in Shanghai and Shenzhen, is up 14.7% this year, ending a losing streak since 2021 that began with the COVID-19 pandemic, problems in the real estate sector and weak consumer confidence.
It gained 12.8% in 2024, ending a two-year decline. The Hong Kong benchmark closed the final session of the year up 0.1%, for a year-to-date gain of 17.7%, ending four consecutive years of losses.
“Within equity markets, China’s results were a positive surprise for many investors,” analysts at Value Partners said in a note this week.
“Various support measures announced during the second half of the year, which focused on monetary policy, real estate and capital markets, largely exceeded expectations and overshadowed ongoing economic concerns,” analysts said. Chinese authorities have implemented some of the boldest measures since September, including interest rate cuts, incentives to buy homes and financing schemes to buy stocks, to shore up the faltering economy and restore domestic confidence.
Capital market stabilization has become a policy requirement, and the general consensus is that the market has bottomed out, China Asset Management said in a note.
Up 34.7%, banking stocks led gains in the onshore market this year as the four biggest state-owned banks hit multi-year highs.
The chip sector rose 53.9% as domestic investors increased stakes in local semiconductor makers amid tightening U.S. chip restrictions.
However, mainland stocks fell on the last trading day of the year, with the benchmark CSI down 1.6% after data showed Chinese factory activity grew at a slower pace in December amid rising trade risks.
The market is in the final stages of trading “driven by political expectations,” following key meetings by Chinese leaders this month, Dai Qing, strategist at Changjiang Securities, said in a note.
Looking ahead to 2025, dividend-paying stocks could still outperform the broader market in the short term, especially when US President-elect Donald Trump’s inauguration in January could bring market disruption, he added.
