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SHANGHAI: China and Hong Kong shares fell on Monday as investors brace for fresh data this week, which will likely add to concerns of the economic health of the world’s second-biggest economy. ** China’s blue-chip CSI300 Index fell 0.1% by the lunch recess, while the Shanghai Composite Index lost 0.3%. In Hong Kong, the benchmark Hang Seng Index fell 0.5%.
Risk appetite has been curbed by signs that China’s post-COVID economic recovery is losing steam. ** Following weaker-than-expected inflation data in May, a set of fresh data to be released this week will also likely undershoot forecasts.
“We think the pace of credit growth was likely subdued in May,” Goldman Sachs said in a note, forecasting that both money and loan data are below consensus. ** In addition, Goldman said that the ongoing destocking cycle is likely to weigh on industrial production growth, while fixed-asset investment growth may have slowed in May from April. Both data will be published later this week.
Nomura chief China economist Ting Lu reiterated calls for further rate cuts, citing continuously worsening economic conditions, and an increasingly likely pause in the U.S. Federal Reserve’s monetary tightening. ** Investors will closely monitor central bank meetings from Europe, Japan and the United States this week.
China’s banking stocks fell more than 1% amid rising expectations that the country will cut benchmark lending rates this month, further eroding lenders’ profitability. ** China’s tech-focused STAR Market and Hong Kong’s Hang Seng Tech Index both fell.
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