SHANGHAI (Reuters)

Mainland China stocks plunged on Wednesday, poised to break a 10-day winning streak as officials failed to bolster confidence in stimulus plans to revive the economy.

Wednesday’s drop marked a reversal from the previous day when mainland Chinese stocks surged after a week-long holiday, while Hong Kong stocks struggled.

As of 02:39 GMT, the benchmark Shanghai Composite index fell 5.3%, and the blue-chip CSI300 Index dropped 5.8%.

The A-share market, consisting of stocks listed in Shanghai, Shenzhen, and Beijing, experienced volatility after returning from holiday, with turnover hitting a record 3.485 trillion yuan ($493.17 billion) on Tuesday.

Hong Kong's Hang Seng index, one of the best-performing major markets globally this year, started the day higher but fell 1.9%.

"The market is widely anticipating a fiscal stimulus announcement this month, with discussions of a package ranging from 2 to 3 trillion yuan," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

"The positive sentiment surrounding Chinese assets relies heavily on the expectation of a significant fiscal stimulus package, and this sentiment could wane if no announcement at least matching these numbers occurs."

Tourism shares were among the top losers on Wednesday, with spending data during the Golden Week holidays showing that it has yet to recover to pre-COVID levels. An index tracking this sector lost 7.8%.

Property shares also contributed significantly to the market's decline, with the CSI 300 Real Estate index plummeting 9.7%.

"The impact of support measures will take time to unfold," noted Samuel Tse, an economist at DBS.

"A sustained recovery in the property and consumption sectors, especially in tier 2 and 3 cities, necessitates further stimulus and a lasting positive wealth effect from the equity market."

In overseas markets, Singapore-traded FTSE China A50 futures fell approximately 1.5%.

($1 = 7.0665 Chinese yuan)