China stocks flat, limp to quarterly drop, as stimulus falls short

Business Recorder reported that Chinese blue chips stayed near one-year lows on Wednesday, as Beijing's newest set of incremental policy steps let down already cautious investors. The benchmark CSI 300 was heading for a 13% decline this quarter, its steepest since the 2022 COVID-19 lockdowns, despite a 0.2% gain in morning trade. The Shanghai Composite added 0.3% by lunch yet is on pace for a 6.2% drop in the quarter, its worst in four years.

A two-speed economy, with solid factory output and exports but soft domestic demand, has weighed on sentiment. A slide in technology shares, previously the strongest segment, has also curbed the rally. The central bank reduced its one-year PSL rate to 1.5%, a 25 basis point cut meant to back infrastructure investment, while authorities also offered home-loan subsidies to eligible first-time buyers.

Pantheon Macroeconomics' chief China economist Duncan Wrigley judged the package weaker than the broad easing of September 2024, which included rate cuts and steps to prop up equities. He added that, with no stock-market stimulus, shares need no further help, while Charles Wang of Shenzhen Dragon Pacific Capital Management called the policy headed the right way but insufficient. Turnover on the Shanghai and Shenzhen exchanges fell to 1.41 trillion yuan on Tuesday, the lowest since July 2025.