## Asian Stocks Stumble Amid Disappointing Chinese Economic Data
Asian stocks took a downturn on Wednesday, reflecting further disappointing economic data from China and a lack of significant stimulus from Beijing, creating a drag on investor sentiment. European markets also braced themselves for another downward opening, with FTSE futures down by 0.15% at 0527 GMT. In contrast, E-mini futures for the S&P 500 index remained largely stable.
MSCI’s Asia Pacific stock index, excluding Japan, amplified losses, declining by 1.17% to reach an 11-week low. This negative performance was fuelled by recent data showing that China’s new home prices had fallen for the first time this year, underscoring the need for more aggressive policy support to stimulate economic activity.
## China’s Economic Data Woes Continue
China’s economic woes were further highlighted on Tuesday when the country reported weaker than expected July activity data. Adding to the uncertainty, Beijing announced that it would no longer publish youth unemployment data. This decision added to the growing concerns about the country’s economic outlook.
The People’s Bank of China (PBOC) unexpectedly lowered its policy rate on Tuesday, a move that came earlier than expected by many investors. This action followed a series of disappointing data related to loans, credit, the housing market and the trust industry, along with the looming threat of deflation.
## Investor Sentiments Toward China At A Low
“Investors’ sentiment toward China is pretty bad,” commented Redmond Wong, Greater China market strategist at Saxo Markets. Wong expressed particular concern about the month-to-month decline in China’s retail sales and weak infrastructure investments, which suggested a lack of local government funding.
China and Hong Kong stocks continued to tumble, with the Hang Seng Index down by as much as 1.39% and China’s blue-chip CSI 300 Index 0.45% lower. “We think the Chinese Central bank is not going hard enough on reducing interest rates, encouraging the banks to lend more and stimulate very flat consumer activity,” said John Milroy, an investment adviser at Ord Minnett.
## Asian Market Toll Continues
Other Asian markets also felt the heat, with Japan’s Nikkei 225 index slipping 1.3% to a two-month low. Banking shares in Japan were down following a report from Fitch Ratings on a possible downgrade of U.S. major banks. Australia’s S&P/ASX 200 index fell nearly 1.5%, marking its biggest drop in about six weeks.
Markets are now looking forward to Britain’s inflation data and the Federal Reserve minutes due later in the day. The eurozone is also set to announce preliminary second quarter GDP figures, which are estimated to show a meager growth of 0.2% and a decline in industrial production.
## U.S. Markets Also Hit
All three major U.S. equity indexes ended lower on Tuesday, following stronger-than-expected U.S. retail sales data. The data increased the odds for the Fed to keep rates at high levels for longer and offered strength to the greenback, putting pressure on riskier currencies, typically the Australian and New Zealand dollars, said Tina Teng, markets analyst at CMC Markets APAC & Canada.
In the commodities market, U.S. crude was down 0.36% at $80.7 a barrel, while Brent fell 0.35% to $84.59 a barrel. Spot gold was up 0.14% at around $1,904.2 an ounce.
Original Story at www.reuters.com – 2023-08-16 06:16:08
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