China's Shanghai Composite index tests four-week low as property market worries weigh

Shanghai Composite index slumped 2.50% as property market worries weighed. Overall sentiments in Asian markets were tepid as Hong Kong's Hang Seng index lost 2.20%. With this slide, the Shanghai Composite index has slipped near four-week low. China's years-long property downturn has carried into 2026, with new-home sales sliding sharply. The country's top 100 developers reported combined contracted sales of 165.5 billion yuan (US$24 billion) in January, down 27 per cent from a year earlier, according to data released over the weekend by China Real Estate Information Corporation (CRIC).

However, economic cues are supportive. Business conditions in China's manufacturing sector continued to improve at the start of 2026, according to the latest PMI data. The rate of output growth accelerated slightly amid higher new orders, including from overseas customers. Firms hired additional staff to help cope with rising workloads and clear their outstanding orders. Purchasing activity also rose. That said, business confidence fell to a nine-month low in January, which was partly attributed to concerns around costs. Notably, the latest survey pointed to the strongest rise in expenses for four months.

 

The headline seasonally adjusted Purchasing Managers' Index (PMI) - a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy - posted above the 50.0 no-change mark for a second straight month in January to signal another improvement in manufacturing sector conditions. At 50.3, up from 50.1 in December, the latest reading indicated a further slight expansion of the Chinese manufacturing sector.

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