China’s technology and property shares are on the brink of a technical correction, raising doubts over the sustainability of a recent rebound in the country’s equities.
The Hang Seng Tech Index rose 26% from an April low, while a Bloomberg Intelligence gauge of property stocks in China and Hong Kong rallied 74%. But they’ve retreated since, signaling that the advance may have been simply a tactical play on cheap valuations. Concerns over earnings, disappointment with the government’s stimulus and geopolitical tensions continue to weigh on sentiment.