China stocks declined on Monday while Hong Kong shares were flat, after Beijing set a modest economic growth target of 5% for 2023, undercutting expectations of big stimulus. China's blue-chip CSI 300 was down 0.6% by the lunch break, while the Shanghai Composite Index lost 0.2%.
Hong Kong's Hang Seng Index was little changed, and the China Enterprises Index slid 0.4%.
China set a modest target for economic growth this year of around 5% on Sunday, as it kicked off the annual session of its National People's Congress (NPC), which is poised to implement the biggest government shake-up in a decade. "As market expectations on the GDP growth target were rising in the run-up to the NPC session, so markets may be slightly disappointed," Nomura economists said in a note, adding they "see no sign of a massive stimulus programme." Tao Wang, head of China economic research at UBS Investment Bank, said there was "no surprise" from the NPC.
"While the government emphasized the importance of reviving consumption, no nationwide consumption stimulus or income subsidy was announced," Wang wrote.
Investors may find more clues on the economic
leadership's focus in 2023 from the announcement of the new
government leadership team and a press conference next week,
Goldman Sachs said in a note.
Sector performance were mixed.
Shares of Chinese property developers fell
after China warned that risks remain in the property market
in Sunday's NPC report.
But the CSI Defence index gained 0.8% after China said it will
boost
defence spending by 7.2% this year.
The CSI Telecom index was up 0.5%, while the Coal index and Energy index dropped 2.2% and 1.3%, respectively. Similar patterns were also seen in the Hong Kong market, with the Hang Seng Telecom index up 2.1%. The mainland Properties index dropped 1.7%. Tech giants in Hong Kong declined 1.0%, with Tencent down 1.1% and Alibaba losing 1.2%. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich and Raju Gopalakrishnan)
