Chinese stocks fall as investors are dissatisfied with the new leadership.
Investors were disappointed with the new leadership, which was filled with President Xi Jinping’s allies, after the Party congress concluded with a reshuffle of the nation’s economic policy team.
The offshore yuan fell as much as 0.7% to 7.2782 per dollar on Monday morning, closing in on a record low set last week. The People’s Bank of China fixed the yuan at 7.1230 per dollar, a departure from the recent pattern of around 7.11 per dollar. The Hang Seng China Enterprises Index has dropped more than 2%.
The reshuffle announced following the Party congress highlighted Xi’s unrivalled control of the ruling party, with loyalists set to take key economic positions. While this may aid in the acceleration of key agendas.
During last week’s congress, Xi defended his Covid Zero policy while refraining from offering stimulus to support the property market. The onshore yuan fell to its lowest level in 14 years last week, and the CSI 300 fell in all but one session.
While markets may see some initial support this week on renewed policy hopes, investors will remain cautious as they await third-quarter growth data, which was abruptly delayed last week.
