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SHANGHAI: China and Hong Kong stocks fell on Monday as investor sentiment remained subdued after disappointing credit data added to worries about China’s slowing economy, compounded by property shocks.
** China’s blue-chip CSI300 Index and the Shanghai Composite Index dropped 1.3% and 1.0%, respectively, by the lunch break. The Hong Kong benchmark Hang Seng Index was down 2.4%.
** China’s new bank loans tumbled in July and other key credit gauges also weakened, even after policymakers cut interest rates and promised to roll out more support for the faltering economy.
** Following softer July Purchasing Managers’ Index (PMI) data, the deeper contraction in trade data, outright deflation, and slower credit growth reaffirmed weak growth in July, analysts at Barclays said in a note, adding that they expect this week’s activity data to also paint a gloomy picture.
** Analysts at UBS said they expect growth momentum bottoming in the July data announcement on Tuesday, with continued decline in property sales and investment.
** The analysts are also expecting rate cuts to ensure sufficient liquidity and lower financing costs.
** Two Chinese listed companies said over the weekend that they had not received payment on maturing investment products from Zhongrong International Trust Co, adding to stress in a financial market already roiled by a property sector downturn.
** Shares of Nacity Property Service Group and KBC Corp fell as much as about 8% each. ** China’s Country Garden, the country’s top private property developer, suspended trading of its 11 onshore bonds.
** Shares of the developer hit a record low on Monday.
** Mainland properties traded in Hong Kong were down roughly 3.9%.
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