SHANGHAI: China blue-chips slipped on Monday after disappointing economic data raised fresh concerns over the outlook for the world’s second-largest economy, but expectations of more policy support to bolster a wobbly recovery put a floor under the drop.
China’s factory output and retail sales growth slowed sharply and missed expectations in July, as new COVID-19 outbreaks and floods disrupted business operations, adding to signs the economic recovery is losing momentum. At the close, the blue-chip CSI300 index was down 0.1%. The CSI300 industrials sub-index fell 1.11% and the SSE Resource sub-index fell 2.83% on the faltering demand outlook.
At the same time, China’s central bank injected 600 billion yuan ($92.61 billion) in medium-term loans into the financial system on Monday, more than expected, in what many market participants interpreted as an effort to prop up the economy.
The Shanghai Composite index inched up 0.03% to 3,517.34.
Investor sentiment around Chinese tech firms also took another hit following a state media commentary on the weekend calling for stronger vetting of online games and “zero tolerance” toward those that distort history. The CSI Info Tech sub-index fell 0.32%.
The smaller Shenzhen index ended 0.63% lower and the start-up board ChiNext Composite index was weaker by 1.307%. Around the region, MSCI’s Asia ex-Japan stock index was 0.6% weaker, while Japan’s Nikkei index closed 1.62% lower. At 0707 GMT, the yuan was quoted at 6.4791 per US dollar, 0.04% weaker than the previous close of 6.4767. So far this year, the Shanghai stock index is up 1.3% and the CSI300 has fallen 5.2%, while China’s H-share index listed in Hong Kong is down 13.8%. Shanghai stocks have risen 3.53% this month.
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