Headline indices of the Australia share market closed down on Monday, 15 July 2019, as data showed China’s economy growing at its weakest pace in nearly three decades, hit by the US trade war, overshadowing after advances in Chinese industrial production and retail sales for June that beat all estimates. At closing bell, the benchmark S&P/ASX200 index fell 43.56 points, or 0.65%, at 6,652.99 points, while the broader All Ordinaries shed 42.61 points, or 0.63%, at 6,746.20.
The world’s number-two economy expanded 6.2% in April-June, the worst reading since the early 1990s, the country’s statistics bureau said on Monday. GDP data marked a further loss of momentum for the economy from the first quarter’s 6.4%, adding to expectations that Beijing needs to announce more support measures to boost consumption and investment and restore business confidence. The GDP figures are within the government’s target range of 6-6.5% for the whole year, down from the 6.6% growth China put up in 2018.
Tariff hikes by President Donald Trump have battered Chinese as well as U. S. exporters, and Chinese leaders have increased spending and loosened controls on bank lending to keep growth within this year’s range of 6% to 6.5%.
There were bright spots for the economy in Monday’s economic data.
Industrial output rose 6.3% in June, from 5.0% in May, which was the slowest increase since 2002. Fixed-asset investment also picked up, rising 5.8% on-year in January-June, from 5.6% in January-May. Retail sales grew 9.8% on-year in June, up from 8.6% in May.
Wealth manager AMP was the top decliner, shedding 16% after the company said the sale of its life insurance and wealth protection business was unlikely to proceed on existing terms due to regulatory constraints in New Zealand. AMP also cancelled its interim dividend.
CURRENCY NEWS: The Australian dollar was up against the U. S. dollar on Monday, on the release of the Chinese economic data indicated the country’s growth had slowed to 6.2% in the second quarter, its weakest pace in at least 27 years but in line with analyst expectations. The Australian dollar changed hands at 70.30 US cents, from 70.00 US cents on Friday.