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China Stocks Slip on Growth Fears, Typhoon Closes Hang Seng

The world’s No2 economy grew at a slower pace than hoped in the last quarter, intensifying the call for more support from Beijing

A passerby walks past an electric monitor displaying various countries' stock price index outside a bank in Tokyo, Japan, March 22, 2023. REUTERS/Issei Kato
A passerby walks past an electric monitor displaying various countries' stock price index outside a bank in Tokyo, Japan, on March 22, 2023. Photo: Reuters


Asian shares drifted backwards on Monday with investors worried over China’s economic woes and a lack of action by Beijing.

China stocks led the retreat after data showed the country’s economy grew at a frail pace in the second quarter as demand weakens at home and abroad.

Stocks across the region slipped as a result despite the lacklustre data not being as bad as has been feared but there was market impatience over the lack of major fiscal stimulus from Beijing.

On a year-on-year basis, China’s GDP expanded 6.3% in the second quarter, accelerating from 4.5% in the first three months of the year, but the rate was below the forecast for growth of 7.3%.


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The Shanghai Composite Index fell 0.87%, or 28.07 points, to 3,209.63, while the Shenzhen Composite Index on China’s second exchange dropped 0.51%, or 10.40 points, to 2,047.70.

Hong Kong’s markets were closed due to the approaching Typhoon Talim.

Data also showed China’s property sales between June and May suffered their largest monthly drop this year, based on sales by floor area, and investment in property also slumped.

Energy companies tumbled 3%, while shares in banks and consumer staples lost 1.9% and 1.1%, respectively. All eyes will now be on an expected Politburo meeting later this month, when top leaders could chart the policy course for the rest of the year.

Elsewhere across the region, in early trade, there were also losses in Sydney, Seoul, Singapore, Manila and Wellington. Mumbai, Taipei and Jakarta edged up while Tokyo was closed for Marine Day.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%, though that followed a 5.6% rally last week.

Eurostoxx 50 futures and FTSE futures both slipped 0.4%. S&P 500 futures and Nasdaq futures were both off a fraction, but that followed hefty gains last week.


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Data on US retail sales, excepting the auto market, are expected to show a rise of 0.3%, continuing the slower trend but solid enough to fit into the market’s favoured soft-landing theme.

The dollar was softer at 138.55 yen but still up from a trough of 137.25, after a loss of 2.4% last week. The euro was firm at $1.1226, having also surged 2.4% last week to clear its former top for the year at $1.1096.

Sterling stood at $1.3089, having risen 1.9% last week, with investors anxiously awaiting UK inflation figures later in the week where another high result would add to the risk of further sizeable rate hikes.

The dollar index hovered at 99.989, after shedding 2.2% last week.

The drop in bond yields was underpinning non-yielding gold at $1,954, after boasting its best week since April.

Oil prices have also been supported by cuts in OPEC supply, seeing crude gain for three weeks in a row before running into profit taking. Prices were also pressured as Libya resumed production over the weekend.

Brent dropped 71 cents to $79.16 a barrel, while US crude fell 66 cents to $74.76.


Key figures

Tokyo – Nikkei 225 <> CLOSED

Hong Kong – Hang Seng Index <> CLOSED

Shanghai – Composite < DOWN 0.87% at 3,209.63 (close)

London – FTSE 100 < DOWN 0.21% at 7,418.76 (0934 GMT)

New York – Dow > UP 0.33% at 34,509.03 (Friday close)


  • Reuters with additional editing by Sean O’Meara


Read more:

China’s Weak 2nd Quarter Growth Shows Need for Support

China Home Prices Slip in June for Weakest Showing This Year

Beijing to Host World’s Biggest Investors for Rare Meeting



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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