Asia’s major stock indexes were under pressure again on Wednesday as more poor data out of China – and the absence of any clear action plan from Beijing – darkened the mood across the region’s trading floors.
China’s new home prices fell for the first time this year in July, data showed, the latest in a string of downbeat numbers that point to a rapid loss in economic momentum and underline the urgency for more bolder policy support to shore up activity
On Tuesday, China reported weaker than expected July activity data, which was followed by news that Beijing would no longer publish youth unemployment data, which further rattled confidence in Beijing.
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That saw China and Hong Kong stocks extend their declines as the deepening property sector crisis also kept investors away. Contagion fears are growing as a major wealth manager, Zhongrong International Trust, has missed dozens of payments. The firm has a sizeable real estate exposure.
The Shanghai Composite Index fell 0.82%, or 26.05 points, to 3,150.13, while the Shenzhen Composite Index on China’s second exchange slipped 0.95%, or 18.80 points, to 1,967.64.
Sector-wise, Hong Kong-listed Chinese tech firms extended their losses too, dropping 1.3%. The Hang Seng Index dropped 1.36%, or 251.81 points, to 18,329.30, while the Hang Seng China Enterprises Index declined 1.47%.
Japan’s Nikkei share average ended at a more than two-month low as China’s economic outlook weighed on risk appetite, while banking shares slid after a report on a possible downgrade of US major banks.
The Nikkei index fell 1.46% to 31,776.82, its lowest close since June 8 and its biggest daily decline since August 3. The broader Topix slipped 1.29% to 2,260.84.
“Concerns have grown over the global economy as the outlook for China, one of the two largest economies in the world, is dim. This has impacted Japanese shares at a time when we are not seeing many market moving cues in Japan,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.
The banking index lost 2.29% after US peers, including JPMorgan Chase and Bank of America, fell after a report said ratings agency Fitch could downgrade multiple US banks.
Elsewhere across the region, in earlier trade, Seoul and Sydney were down more than 1%. Taipei, Singapore, Mumbai, Bangkok and Jakarta also retreated, while Manila and Kuala Lumpur were the only gainers.
MSCI’s gauge of Asia Pacific stocks outside Japan widened losses to decline 1.17% to an 11-week low.
UK Inflation Data Due
Europe is poised to open lower for another day with FTSE futures down 0.15% at 0527 GMT. E-mini futures for the S&P 500 index were largely flat.
Markets will get another read on major economies with Britain’s inflation data and Federal Reserve minutes out later in the day.
The euro zone also announces preliminary second quarter gross domestic product figures, which are estimated to show meagre growth of 0.2% and a decline in industrial production.
All three major US equity indexes ended lower on Tuesday, after a stronger-than-expected US retail sales data.
The data increased the odds for the Fed to keep rates at high levels for longer and offered strength to the greenback, pressing on riskier currencies, typically the Australian and New Zealand dollars.
US crude was down 0.36% at $80,7 a barrel, while Brent fell 0.35% to $84.59 a barrel.
Spot gold was up 0.14% at around $1,904.2 an ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 1.46% at 31,766.82 (close)
Hong Kong – Hang Seng Index < DOWN 1.36% at 18,329.30 (close)
Shanghai – Composite < DOWN 0.82% at 3,150.13 (close)
London – FTSE 100 < DOWN 0.17% at 7,377.40 (0936 BST)
New York – Dow < DOWN 1.02% at 34,946.39 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China’s Shock Rate Cuts Ring Alarm Bells After Weak July Data
China Stops Publishing Youth Jobless Data Amid Record Numbers
Hang Seng Slides on China Fears, Bargain-Buyers Lift Nikkei
