Asian stocks dip, Hang Seng tumbles as China outlook fails to impress

Most Asian stocks fell on Tuesday as investors collected recent profits in the technology sector, while China’s economic outlook and plans for the year spurred little improvement in sentiment towards the country.
Regional markets tracked overnight losses in Wall Street, as record-high valuations and anticipation of more signals on U.S. interest rates also spurred a bout of profit-taking. U.S. futures fell slightly in Asian trade.
Chinese stocks muted, Hang Seng plummets as 2024 targets underwhelm
China’s Shanghai Shenzhen CSI 300 and and Shanghai Composite moved in a flat-to-low range on Tuesday, while steep losses in mainland stocks dragged Hong Kong’s Hang Seng index down 2.5%.
Sentiment towards China worsened after Beijing set a 2024 gross domestic product target of 5%, the same as 2023. But with a lower target for fiscal spending, investors questioned just how China planned to shore up growth to meet its GDP target.
The targets were unveiled during the 2024 National People’s Congress, where the government also promised more measures to increase consumer spending and confidence. But they signaled little change from Beijing’s earlier assurances of policy support, which had so far done little to support the economy.
Separately, private PMI data pointed to slowing growth in China’s key services sector, which bodes poorly for the economy.
Concerns over China spilled over into broader Asian markets, particularly those with high trade exposure to the country. Australia’s ASX 200 relinquished early gains to trade 0.2% lower, despite strong current account data that heralded a positive GDP reading on Wednesday.
Futures for India’s Nifty 50 index pointed to a muted open, with local tech stocks likely to track weakness in their global peers. But the Nifty, along with the BSE Sensex 30 index, remained close to record highs hit last week, following stellar GDP figures from India.
Tech profit-taking hits Japan, South Korea
Losses in technology stocks dragged South Korea’s KOSPI and Japan’s Nikkei 225 lower on Tuesday, with the latter also coming off record highs above 40,000 points.
Weakness in the tech sector spilled over from Wall Street, as an artificial intelligence-driven rally cooled in anticipation of more cues on interest rates from a two-day testimony from Fed Chair Jerome Powell.
Weakness in tech was also driven by overnight losses in Apple Inc (NASDAQ:AAPL), as the iPhone maker was slapped with a massive, $2 billion antitrust fine by Europe.