Asian shares declined the most in a month after China’s debt swap program looked insufficient to some investors and data showed persistent deflationary pressures in the world’s No. 2 economy.
A gauge of the region’s equities dropped as much as 1.3%, led by heavyweights including Tencent Holdings and Meituan. Taiwan Semiconductor Manufacturing Co. also fell after a Reuters’ report saying the US told the firm to halt shipments of some advanced chips often used in AI applications to Chinese customers.
China’s CSI 300 onshore benchmark lost as much as 1.4%, before narrowing the decline to 0.1% at the midday break. An index of Chinese companies listed in Hong Kong shed over 2%.
The broad weakness reflects lingering concerns about the prospect of the world’s No. 2 economy, after Beijing unveiled a 10 trillion yuan ($1.4 trillion) program to defuse local governments’ debt risk but stopped short of unleashing new fiscal stimulus.
In addition to anemic inflation, sentiment toward China is also faltering as foreign direct investment continues to slump.
Investors had hoped for more potent stimulus measures that would directly boost demand from a key Chinese legislature meeting last week, especially after Donald Trump’s presidential victory injected fresh uncertainty over tariffs.
