Stock traders look to China’s ‘two sessions’ for drivers as political meeting begins under cloud of ‘bubble’ warning

The Hang Seng Index has weakened on the run-up to and during the past four ‘two sessions’ meetings, and this week has been choppy at best

China cannot afford a sudden tightening of monetary policy, because the private sector has not fully recovered yet, according to China Renaissance

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The fourth session of the 13th National People's Congress (NPC) opens at the Great Hall of the People in Beijing on March 5, 2021. Photo: Xinhua

Published: 12:56pm, 5 Mar 2021Updated: 4:12pm, 5 Mar 2021

Investors are hoping for uplifting signals from China’s top officials before the nation’s most important political gathering after a troubling week caused by a US bond-market rout. So far, it’s been underwhelming as stocks extended losses.

The Hang Seng Index has weakened on the run-up to and during the past four “two sessions,” and this week has been choppy at best even though the stock benchmark is still just slightly higher than it was a week ago. Stocks extended losses from Thursday as concerns about asset bubbles and tightening policy screws dominate sentiment.

This year marks the beginning of China’s 14th five-year plan and the centenary milestone in the founding of the Communist Party.

The Chinese People’s Political Consultative Conference, the top political advisory body, kicked off the sessions on Thursday, while the lawmaking National People’s Congress (NPC) followed a day later. Premier Li Keqiang released his work report today.

Here is what some analysts are saying about the meetings and the expectations for markets.