Chinese stocks experienced another downturn on December 11, 2024, as the initial optimism from promises of looser monetary policy and proactive fiscal measures faded. The Hang Seng Index in Hong Kong fell by 0.8%, while the CSI 300 Index in China slipped by 0.2%. This decline was largely attributed to disappointing trade data that tempered the earlier enthusiasm. Additionally, concerns over potential currency devaluation added to the market's volatility. The People's Bank of China maintained that the yuan's exchange rate foundation remains solid, but the possibility of a weaker yuan as a countermeasure to anticipated U.S. tariffs under a potential second Trump presidency looms large. This could lead to capital outflows and regional currency devaluations, further complicating China's economic landscape.
The Direxion Daily FTSE China Bear 3x Shares (YANG) ETF closed with a 3.06% increase, reflecting the bearish sentiment surrounding Chinese equities.