The Hang Seng Index declined 2.3 per cent to 16,209.03 as of 11.10am local time, the biggest retreat since January 17. The Tech Index tumbled 3.6 per cent, while the Shanghai Composite Index added 0.1 per cent. A gauge tracking Chinese stocks listed in New York tumbled 4 per cent overnight.
Tencent slipped 2.5 per cent to HK$269.40, Alibaba lost 3.4 per cent to HK$69.65 while rival JD.com slid 6.1 per cent to HK$84.05. EV maker BYD lost 2.6 per cent to HK$187.50 and Li Auto tumbled 4.4 per cent to HK$153.
“The growth target range shows Beijing acknowledges economic headwinds exist and wants to reserve flexibility in policymaking,” said Gary Ng, a senior economist for Asia-Pacific thematic research at Natixis.
The government also set its ratio of deficit to GDP at 3 per cent for 2024, and will also issue 1 trillion yuan ultra-long-term special treasury bonds to stimulate the economy.
“We were hoping to see a more stimulative stance in fiscal policy,” said Aninda Mitra, Head of Asia Macro & Investment Strategy at BNY Mellon Investment Management. “But the central government deficit of only 3 per cent of GDP is disappointing.”
The Hang Seng Index had surged 6.6 per cent last month after Beijing rolled out a slew of market rescue measures to put a floor under the sliding stock prices. Some investors might have sold their positions to lock in gains after the stimulus measures, especially the deficit target, turned out to be less forceful than expected, according to Jason Chan, an investment strategist at Bank of East Asia.
Other key Asian markets also traded lower. Japan’s Nikkei 225 weakened 0.4 per cent and South Korea’s Kospi Index lost 0.5 per cent, while Australia’s S&P/ASX 200 was little changed.