SHANGHAI: China stocks slumped on Friday, tracking regional peers lower amid strength in the US dollar and a pull-back in technology shares, with strong foreign outflows weighing on the market. Foreign portfolio flows have turned.
About 33 billion yuan ($4.54 billion) left the mainland this month via the Northbound leg of the Stock Connect Scheme, following four months of net inflows.
China stocks slip as Beijing stands pat on benchmark rates
The Southbound leg also reported 129 billion yuan of outflows from the mainland to Hong Kong so far this year.
Additionally, investors remained cautious as the Chinese Communist Party’s central committee is set to gather in July for a key meeting known as a plenum, the third since the body of elite decision-makers was elected in 2022, focusing on reforms amid “challenges” at home and complexities abroad.
“For the upcoming ‘Third Plenum’, we expect the reform focus to be on both containing left-tail risks and growing right-tail potential for China in the ‘post-property’ era,” said Goldman Sachs analysts in a note.
“Rather than a ‘big bang’ policy initiative, we expect a continuation, or even scale-up, of existing reform measures on a multi-year horizon.”
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