Foreign investors’ selling of Chinese shares gained some momentum in May, as flagging domestic demand and expectations for weak corporate earnings led to steep falls on mainland and Hong Kong stock markets, reports Reuters. Refinitiv data shows foreigners sold $1.71 billion worth of mainland shares this month via Stock Connect, a key cross-border link between the mainland and Hong Kong exchanges, after selling $659 million in April.
The selling marks a slow reversal of their heavy investment totaling $20.92 billion in January when China reopened its economy after three years of COVID restrictions, spurring a wave of bullish expectations for growth.
Such hopes were dashed as domestic and overseas demand wilted, and the recovery proved uneven. According to data from the National Bureau of Statistics, profits at China’s industrial firms slumped in the first four months of the year.