China stocks end lower as uneven recovery keeps investor sentiment fragile

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SHANGHAI – Chinese stocks closed lower on Wednesday due to a bumpy economic recovery after the country abandoned its strict anti-coronavirus policy, and uneven first-quarter macro data weighed on sentiment.

** China’s leading CSI 300 fell 0.9%, while the Shanghai Composite closed 0.7% lower.

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**The Hang Seng Index fell 1.4%, while the Hang Seng China Enterprise Index fell 1.6%.

** China reported higher-than-expected first-quarter growth on Tuesday, but some data pointed to uneven recovery trends.

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** Real estate developers led the declines with a 2.6% drop, after data on Tuesday showed real estate investment fell 5.8% from a year earlier.

** The data also showed that factory production growth was just below expectations, while retail sales growth hit its highest level in nearly two years.

** “We caution (that) some strengths, such as pent-up demand and production catching up after the COVID ‘exit wave’, may sequentially fade in the coming months,” Goldman Sachs said in a note.

* State planner spokeswoman Meng Wei said on Wednesday that China is preparing proposals to boost economic recovery and expand consumption.

Separately, a Reuters survey showed that China is widely expected to stand still on lending standards at the monthly fix on Thursday.

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** Amid weak sentiment, some investors continued to bet on AI stocks. The frenzy over Chinese equivalents of OpenAI’s ChatGPT chatbots has boosted shares of companies in the technology, media and telecoms (TMT) sector.

** Media stocks rose 0.8%, artificial intelligence 0.3%, and semiconductors 0.5%.

** Some analysts expect AI trading to become a focus in 2023, while others argue that it is pure speculation.

** Hong Kong-listed tech giants fell 2.4%, with Alibaba Group Holding Ltd slipping 2.7%, even after Reuters reported that Chinese regulators are expected to fine Ant Group about a quarter less than the $1 billion initially planned and slash classified. against him. (Reporting by Shanghai Newsroom; Editing by Varun HK and Sonia Cheema)