Futures on the Hang Seng China Enterprises Index (HSCEI; CHN.cash) fell nearly 0.7%, with sentiment hit by a combination of the recent tech sell-off on Wall Street and a fresh batch of weaker-than-expected Chinese economic data. The ongoing deterioration in the property market continues to weigh on consumer demand and is increasingly spilling over into softer business activity, as companies scale back capital spending.
CHN.cash is currently trading below its three key exponential moving averages on the daily chart (EMA10, EMA30, EMA100), indicating strong downward momentum. Futures are hovering around the critical support level near 8,890, and a drop below the yellow buffer zone (8,825–8,890) could trigger further selling. On the upside, the announcement of new stimulus measures, coupled with a rebound toward the EMA100, could help the index overcome selling pressure and stabilize. Source: xStation5
What is driving CHN.cash today?
- Retail sales, consumption and property: Consumer activity remains subdued (1.3% YoY vs 2.8% expected) as the prolonged property downturn continues to erode household wealth and confidence. Falling home prices and contracting real estate investment are feeding through to weaker spending, with retail sales missing expectations and autos a key drag after trade-in subsidies were paused. Authorities have signalled support for consumption, but policy measures so far have been targeted and insufficient to materially lift sentiment.
- Soft investment: Fixed-asset investment contracted more sharply than expected (-2.6%), driven by deepening declines in property investment and cautious private-sector spending. Developers’ deleveraging, weak demand visibility and the absence of large-scale fiscal stimulus have weighed on capex. While Beijing has pledged additional fiscal support and special bond issuance, markets remain sceptical about the timing and scale of effective follow-through.
- Industrial production: Industrial output growth slowed to its weakest pace since August (4,8% vs 5% expected), reflecting soft domestic demand and efforts to curb excess supply in some sectors. External demand has provided partial support, but weaker consumption and investment at home are limiting momentum. Without stronger policy easing to revive demand, manufacturing activity risks further loss of traction in coming months.
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