Chinese Developer Stocks Plunge as Beijing Holds Back Stimulus

Investors are losing faith in the prospects of a rebound in Chinese developer stocks this year, as Beijing's reluctance to unleash sweeping stimulus measures deepens the pessimism surrounding the sector. A gauge of developers' shares recently notched its biggest weekly drop in four months after a key industry meeting on Tuesday failed to yield any concrete steps to revive the struggling real estate market.

The property sales outlook remains bleak, with Morgan Stanley predicting that sales will likely remain weak in the third quarter. This comes despite better-than-expected economic growth data in China, which has undermined the case for immediate stimulus measures from the government. Investors had hoped that Beijing would step in with support to bolster the embattled real estate industry, but the lack of any such action has only served to deepen the gloom surrounding Chinese developer stocks.