SHANGHAI: China stocks closed lower on Monday, tracking global markets, as fears of a US recession sent investors fleeing from risk even after data showed growth in China’s services activity accelerated in July.
Investors globally rushed into safer bonds after bleak US economic data triggered worries about whether the Federal Reserve will be able to engineer a soft landing and whether it requires more aggressive interest rate cuts to stave off a slowdown in the world’s largest economy.
Meanwhile, in China, the world’s second-largest economy, growth in the services activity accelerated in July, helped by new orders, although momentum in overseas demand eased to its slowest in 11 months, a private-sector survey showed on Monday.
The Caixin/S&P Global services purchasing managers’ index (PMI) rose to 52.1 from 51.2 in June, pointing to expansion for the 19th straight month.
Still, China grew much more slowly than expected in the second quarter and faces deflationary pressures and a protracted property slump, with retail sales growth in June grinding to its weakest pace since early 2023.
At the close, the Shanghai Composite index was down 1.54% at 2,860.70.
The blue-chip CSI300 index was down 1.21%, with its financial sector sub-index lower by 0.48%, the consumer staples sector up 1.32%, the real estate index up 0.01% and the healthcare sub-index down 0.26%.
The smaller Shenzhen index ended down 2.08% and the start-up board ChiNext Composite index was weaker by 1.893%.
At the close of trade, the Hang Seng index was down 247.15 points or 1.46% at 16,698.36. The Hang Seng China Enterprises index fell 1.64% to 5,876.64.
The sub-index of the Hang Seng tracking energy shares dipped 4.9%, while the IT sector dipped 0.68%, the financial sector ended 2.12% lower and the property sector rose 2.18%.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 4.18%, while Japan’s Nikkei index closed down 12.4%.
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