China Stocks Crash Most Since Covid As Desperate Investors Bet On Saturday MoF Bazooka Announcement

China's mainland stocks ended a stimulus-induced winning streak with a significant decline, as the benchmark CSI 300 crashed 7.05% to close at 3,955.98, its worst day since February 2020. The tech-focused ChiNext fell over 10%, the biggest single-day decrease on record, while the STAR 50 dropped 2.55%. The decline came after a fresh policy announcement by the NDRC stopped short of the big fiscal stimulus package many had been hoping for. Despite the disappointment, Tuesday still ranked among the best days ever for mainland stock indexes as stocks caught up after a week-long holiday. However, Hong Kong shares plunged sharply on Tuesday, closing down 9.41%, and mainland markets followed with their own decline on Wednesday. Investors took profits from health-related stocks, with Biotech company Imeik Technology Development dropping the most out of the CSI 300 components, down 18.4%. The Ministry of Finance announced that it will brief reporters on Saturday about "intensifying countercyclical adjustment of fiscal policy to promote high-quality economic development", stoking expectations for another stimulus revelation. However, skeptics point to fundamental issues in the economy, including a prolonged property crisis, debt risks, and weak consumption, and a perceived lack of determination on the part of authorities to address them. The market now turns its hopes to the Ministry of Finance press conference on Saturday, where questions are swirling about the size of the fiscal stimulus. SocGen cautioned that investors should keep their expectations in check for the size of the fiscal stimulus, and the French bank's rationale is that the Saturday briefing can disappoint again, given that markets now seem to expect something between RMB1-3tn.