China Stocks Resume Downward Slide Amid Worries of Weak Economic and Earnings Outlook

Li Chen
12 Aug, 2024
Hong Kong

Stocks in Hong Kong and Shanghai struggled to advance in Monday's trading as investors awaited key economic data later in the week. 

The Hang Seng index and the CSI 300 index traded around the flatline amid hopes of more policy support from the People's Bank of China. 

Retail sales in July are expected to show an increase of 2.5%, and industrial output is likely to increase more than 5%, according to an informal survey of nine economists in Shanghai and Hong Kong conducted by Ticker.com. 

Chinese stocks have been under pressure, and benchmark indexes have erased this year's gains amid persistent worries about weak consumer demand growth, the protracted real estate market crisis, and the uneven and fragile economic recovery. 

The People's Bank of China is expected to cut its reserve ratio for banks by 25 basis points to facilitate the sale of long-term bonds by the Chinese government. 

Corporate earnings so far in the quarter have lagged market expectations amid weak domestic demand growth and falling investment in property-related industry sectors. 

China's current account surplus narrowed to $54.9 billion in the second quarter from $59.3 billion in the corresponding quarter in the previous year, according to data released by the China's State Administration of Foreign Exchange. 

The international goods surplus widened to $167.1 billion from $160.3 billion, but service deficit widened to $61.7 billion from $49.2 billion in the period a year ago.  

 

China Stock Movers 

The Hang Seng index edged up 0.01% to 17,095.06, and the CSI 300 index decreased 0.1% to 3,327.74. 

Guangzhou R&F Properties was nearly unchanged at HK 79 cents, and the real estate development company said in a filing with an exchange that its unit missed interest payments of $147 million. 

The company said it is in negotiations with its lender to find a workable solution and may revise its future payment plans. 

Galaxy Entertainment Group decreased 4.9% to HK$29.30 after local authorities planned to crackdown on unlicensed money exchange service providers for gambling. 

Technology stocks traded volatile in Hong Kong following a muted rebound in Friday's trading in New York. 

Alibaba Group jumped 0.8% to HK $78.45, Baidu decreased 1% to HK $82.35, and Meituan dropped 2.7% to $103.30.