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Home / International Markets / China stocks weaken after soft activity, spending data; Hong Kong also down
China stocks weaken after soft activity, spending data; Hong Kong also down

China stocks weaken after soft activity, spending data; Hong Kong also down

SHANGHAI: China stock slipped on Thursday morning, as soft August activity and spending data rekindled worries the world’s second largest economy may be starting to lose some steam as lending costs rise. The CSI300 index was down 0.2 percent to 3,835.00 points at the end of the morning session, while the Shanghai Composite Index lost 0.2 percent, to 3,378.56 points. Fixed-asset investment, a key growth driver for the nation’s economy, grew 7.8 percent in the first eight months of the year, the weakest pace since December 1999 and cooling from 8.3 percent in January-July.

Factory output also disappointed, rising 6.0 percent in August from a year earlier, the weakest pace in nine months, statistics bureau data showed. “In particular, infrastructure spending has now begun to cool as the front-loading of fiscal spending this year means that local governments are now having to pare back their outlays,” Capital Economics said in a note. “With tighter monetary conditions still weighing on credit growth, we expect a further slowdown in economic activity in coming quarters.” Most sectors lost ground in the morning, with material and energy shares leading the retreat, sliding 1 percent and 0.7 percent, respectively. But developers rose 2 percent after data showed real estate investment growth picked up pace again in August. A resilient property market will be good news for China’s policymakers, who want to keep the real estate market stable ahead of a once-in-five-year Communist Party congress in October. Real estate investment, which directly affects 40 other business sectors in China, is considered a crucial driver for the economy.