Asian shares slide as China holds rates and stable growth cools stimulus bets

what happened

China and Hong Kong shares declined on Tuesday as the wider Asian region retreated. Beijing left its key lending rates unchanged for the 17th straight month, in line with market expectations. By the lunch break the CSI300 was down 0.5%, the Shanghai Composite slipped 0.1%, the Hang Seng fell 1%, and the Hang Seng Tech index dropped 1.2% to a two-year low.

China's economy grew 4.5% last quarter, beating estimates, after a three-year low, as strong exports offset weak domestic demand. Analysts at Maybank said in a note that the stable headline growth reduces the urgency for a new round of fiscal and monetary stimulus. Bank and financial stocks fell 1.4%, while the gold-related sector lost 1.2% as bullion kept slipping.

The Beijing Stock Exchange 50 Index bucked the trend, jumping more than 4% after the CSRC said it would launch an ETF tracking the index.

why it matters

The message for markets is that Beijing is in no hurry to ease policy further, which weakens the case for quick stimulus support for Chinese equities. Oil rose as geopolitical risks weighed on sentiment, while investors await results from major AI bellwether companies.

market impact

China and Hong Kong equities: no new stimulus weighs on the sector, especially banks and tech

instruments