Asian stocks slammed by China woes, higher U.S. inflation
Investing.com-- Most Asian stocks sank on Monday, with Chinese indexes leading losses on persistent concerns over slowing economic growth, while stronger U.S. inflation readings also pushed up fears of a more hawkish Federal Reserve.
U.S. producer price index inflation read higher than expected on Friday, indicating that inflation was seeing a potential resurgence after retreating in the first half of the year. The reading, which came after data also showed an increase in consumer price index inflation, pushed up concerns that the Fed will have more impetus to keep raising interest rates.
Wall Street indexes sank on Friday, providing a weak lead-in to regional markets.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 1.3% and 0.9%, respectively, on Monday. Hong Kong's Hang Seng index slid 2.5%, hit by a mix of tech weakness and property sector losses.
Heavyweight Chinese property stocks were hit with a fresh wave of selling after Country Garden (HK:2007), one of the country’s biggest developers, warned of a massive, $7.6 billion loss in the first half of 2023.
The stock slid 13% to a new record low on Monday, as reports suggested the firm was also facing difficulty in meeting its debt obligations and at risk of a default. Such an event could mark another high-profile default for China’s property market, and heralds more headwinds for the country’s key economic engines.
Data on Friday also showed that Chinese loan growth slumped in July, capping off a slew of weak economic readings for the month. Focus is now on retail sales and industrial production data due on Tuesday.
While weak economic readings from China buoyed expectations of more stimulus measures in the country, government officials have so
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