Investors shift focus to China’s July Politburo meeting for stock-stimulus clues
‘We may see an acceleration of policy implementation in the near term to support consumer and technology industries,’ an analyst says
Investors are looking ahead to an economic policy gathering convened by China’s top leaders for clues on the direction of the stock market, after state intervention tentatively stabilised sentiment.
The Communist Party is expected to kick off its July Politburo meeting next week, in which President Xi Jinping and his colleagues in the prime decision-making body will set the policy tone for the second half. Calls have been growing among investors for more policy support for economic growth after the latest data showed an uneven recovery.
“The July Politburo meeting may strike a positive tone on policies,” said Deng Lijun, an analyst at Huajin Securities. “We may see an acceleration of policy implementation in the near term to support consumer and technology industries.”
The Politburo meeting was likely to prioritise technological innovation over consumption, with state resources set to tilt towards artificial intelligence, quantum computing and advanced manufacturing amid the heightened China-US tech race, Morgan Stanley said in a report last week. Consumption would be put on a back burner, as policymakers perceived it as a by-product of industrial upgrade and employment rather than a policy lever, it said.
The tech-heavy Star Market 50 index fell 2.3 per cent on Wednesday after an 11 per cent rebound a day earlier spurred by direct state buying and the regulatory efforts to prop up sentiment.