Chinese shares will likely come under pressure upon their return from a week-long break, reflecting losses in the Hong Kong market and sluggish holiday spending.

Mainland markets reopen Thursday after being shut since Oct. 1 for the National Day holiday. A gauge of major Chinese firms listed in Hong Kong has fallen 1.7% during this period, leaving the onshore benchmark CSI 300 Index vulnerable to renewed selling after it fell below a key technical support level late last month.

Investors will have to contend with early data signaling entrenched pessimism among Chinese consumers, a government showing little appetite for potent stimulus, and lingering external uncertainties. While a recent patent license deal between Qualcomm Inc. and Huawei Technologies Co. has rekindled enthusiasm toward China’s technology sector, analysts say stronger economic data and earnings are needed to justify a more bullish stance.

“HSI is down for the period and seems like no positive news on the consumption front, so probably a lower open,” said Leonid Mironov, a portfolio manager at Gavekal Capital. “With the fifth plenum at the end of the month, potentially cautiousness will prevail until then,” he said, referring to a key Chinese Communist Party meeting slated for late October. Hong Kong’s benchmark Hang Seng Index has fallen 2% since Sept. 30.

Early data pointed to muted travel and softer spending per person, as well as lukewarm city entertainment during the so-called Golden Week holiday period, including a sharp drop in box-office sales, according to Citigroup Inc.

The dismal consumption picture came after policymakers unveiled a slew of targeted measures aimed at keeping economic growth on track rather than delivering a broad revival in late September. The support package, including mortgage subsidies and expanded lending to select industries, left investors unimpressed and waiting for more aid to address underlying demand weakness.

Investors are now shifting their attention to the Communist Party’s fifth plenum scheduled Oct. 26-29, a crucial gathering that may lead to greater efforts to rejuvenate growth. In an article published on Oct. 1, Finance Minister Lan Foan said China is mulling additional fiscal policies to reach its growth target for 2026.

“Beijing’s additional policy tweaks are by no means certain, but they are logical choices for the country that needs to at least lean against the persistent softness in domestic demand and keep the favorable capital market environment for businesses leading the country’s tech catch-up in strategic industries,” said Homin Lee, senior macro strategist at Lombard Odier Singapore.

Technical charts are also sending warning signals. The CSI 300 recently breached a key support line of 4,418, a previous low in March, leaving it at a critical juncture where failure to rebound risks unleashing deeper technical selling.

“If it can bounce back strongly and quickly, it might be okay,” said Matt Maley, chief market strategist at Miller Tabak. “Otherwise, any further weakness will signal a very important change in trend.”To be sure, there are also potential bright spots in the market. For one, China’s AI-related hardware tech stocks may get a boost from Qualcomm’s agreement to license patents related to Huawei’s novel LogicFolding chipmaking technique, a win for the latter’s technological ambitions.

That said, “I think the AI chip space certainly has a lot more reasons to be bullish than the broader market,” according to Mironov.

Elsewhere in Chinese markets, the onshore yuan is expected to remain firm after trading resumes on Thursday, according to analysts. Its offshore peer has largely held steady against the greenback during the Golden Week even as a Bloomberg gauge of the US currency has risen about 0.3%.

Similarly, the country’s sovereign bonds will likely be immune from the partly inflation-induced turmoil in developed debt markets, given China’s slowing economy and deflationary pressures.