Following the much-anticipated meeting between Presidents Joe Biden and Xi Jinping, Chinese stocks experienced a decline as traders observed only modest progress in the strained ties and fresh data renewed concern over the world’s second-largest economy.
The Hang Seng China Enterprises Index closed down 1.4%, leading losses among major Asia equity gauges. On the mainland, the benchmark CSI 300 Index dropped nearly 1%, snapping a two-day advance.
There were high hopes that the Xi-Biden talk would be a turning point after geopolitical tensions affected Chinese stocks for much of the year. While Biden said the talks had yielded progress in amending relations, traders were cautious in interpreting the remarks. Foreigners resumed selling mainland shares on Thursday.
Investors expressed concerns about Biden’s comment referring to Xi Jinping as a dictator at his press conference, potentially overshadowing the progress both sides have made.
Despite the meeting being seen as a step in the right direction, there was no evidence of progress on bigger issues like US curbs on microchip exports, tariffs, or tensions in the South China Sea.
However, some sectors mentioned as areas of cooperation in the bilateral meeting advanced. Shares of Chinese airlines rose after the leaders agreed to significantly increase direct flights next year.
The property sector continued to be a source of bad news, with home prices falling the most in eight years in October, indicating worsening industry slump. The monthly economic report also showed an uneven recovery in the Chinese economy.
The Hang Seng Tech Index slumped 1.9% with Xiaomi Corp experiencing the biggest drop, plunging more than 6%.
In addition to the geopolitical factors, there were concerns about the property sector, and the tech index slumped with Xiaomi Corp’s plunge.
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