Chinese shares saw a significant decline as economic stimulus plans from Beijing fell short of investor expectations, leading to a 3.5% drop in the Shanghai Composite index.

Investor disappointment was evident as the Hang Seng Index plummeted 9.4%, following NDRC Chair Zheng Shanjie's vague assurances of achieving a 5% GDP growth target for 2024.

Overall spending levels announced by the government were significantly lower than the multi-trillion yuan amounts anticipated by analysts, contributing to market skepticism.

The NDRC's new measures aimed at boosting investment and supporting small to medium-sized businesses did not address the pressing issues of declining housing sales and prices.

China's economy continues to struggle with recovery post-COVID-19, facing challenges such as high urban youth unemployment at 18.8% and a troubled property market.

Despite the recent declines, the People's Bank of China's measures, including interest rate cuts and over $100 billion in funding, previously led to a nearly 40% increase in the CSI 300 index.

UBS chief economist Tao Wang suggested that the market was expecting a more substantial fiscal stimulus package, estimated between 1.5 to 2 trillion yuan ($210 billion to $280 billion) soon.

The rally in Chinese stocks that began in late September was initially fueled by expectations of government stimulus for 2024, but those hopes have since diminished.

Market adjustments were reflected in the U.S. Treasury yields, with the 10-year note decreasing to 4.02%, indicating shifting expectations for Federal Reserve interest rate policies.

The downturn in Chinese markets was exacerbated by a tech selloff on Wall Street, geopolitical concerns, and expectations of a smaller Federal Reserve rate cut.

In contrast to the declines in China, Japan's Nikkei 225 index rose by 0.6%, buoyed by strong performances from companies like Seven & i Holdings.

U.S. equity futures remained stable in Asia, supported by positive sentiment from Federal Reserve officials regarding interest rate management for a soft economic landing.