China Indexes Drop 1% After Manufacturing Activities Contracted for the Fourth Consecutive Month

Li Chen
02 Sep, 2024
Hong Kong

Stock market sentiment soured after manufacturing activities contracted and weak quarterly results from leading property developers. 

The Hang Seng and CSI 300 indexes dropped more than 1%, following a rebound of nearly 4% in April, after the official manufacturing survey showed activities contracted for the fourth month in a row in August. 

The official Manufacturing Purchasing Managers' Index fell to 49.1 in August, down from 49.4 in July, the National Bureau of Statistics reported Monday. 

The non-manufacturing survey, which includes activities in service and construction sectors, edged slightly higher to 50.3 from 50.2 in July. 

Caixin Manufacturing PMI, which mostly focuses on private and smaller companies, held at 50.4 in August. 

A reading above 50 indicates expansion, and below 50 shows contraction in activities. 

China's manufacturing sector is going through a rough patch amid restrictive economic policy and an uncertain macroeconomic outlook amid fragile economic recovery over the last nine months. 

Market sentiment was also weak after two China Vanke reported its first interim loss in two decades, and China Construction Bank and Industrial and Commercial Bank of China reported weaker-than-estimated quarterly results. 

 

China Stock Movers 

The Hang Seng index declined 1.6% to 17,700.40 and the CSI 300 index dropped 1.2% to 3,280.55.

New World Development Company dropped 13% to HK $6.82 after the real estate developer estimated annal loss. 

China Vanke declined 4.4% to HK $3.93, and the state-controlled residential real estate developer reported a net loss of 9.85 billion yuan in the first six months of 2024. 

The company swung from a net profit of 9.87 billion yuan in the six-month period in 2023 after revenue dropped 29% to 142.8 billion yuan. 

Contracted home sales in the period plunged 37% to 127 billion yuan. 

China Vanke, along with other leading mainland developers Shimao Group, Kaisa Group, and Fantasia, reported large losses last Thursday. 

China Resources Land declined 4.5% to HK $21.15 and China Overseas Land dropped 5.3% to HK $11.72. 

China Shenhua Energy eased 0.5% to HK $33.55 after the coal producer said net income in the first half declined 11% from a year ago. 

ICBC declined 3.2% to HK $4.35 and China Construction Bank dropped 1.8% to HK $5.42 after the two leading banks reported a 2% decline in profit in the first half.