SHANGHAI: China stocks closed down on Monday, after data showed the country’s economy grew at a frail pace in the second quarter as demand weakened at home and abroad, raising pressure on policymakers to deliver more stimulus to shore up activity.
China’s blue-chip CSI 300 Index ended 0.8% lower, while the Shanghai Composite Index declined 0.9%.
The Hong Kong market was closed for the day due to approaching Typhoon Talim.
On a year-on-year basis, China’s GDP expanded 6.3% in the second quarter, accelerating from 4.5% in the first three months of the year, but the rate was below the forecast for growth of 7.3%.
Data also showed China’s property sales between June and May showed the largest monthly drop this year, based on sales by floor area, and investment in property also slumped.
“To counteract persistent growth headwinds, we expect more (targeted) easing measures in coming months, with a focus on fiscal, housing and consumption, although the magnitude of stimulus should be smaller than in previous easing cycles,” Goldman Sachs said in a note.
Most sectors fell. Energy companies tumbled 2.4%, while shares in banks and media lost 1.5% and 1.9%, respectively.
Separately, China’s central bank rolled over maturing medium-term policy loans and kept the interest rate unchanged as expected on Monday, however markets expect authorities will need to unleash more stimulus to support slowing economic growth.
All eyes are on an expected Politburo meeting later this month, when top leaders could chart the policy course for the rest of the year.
Comments
Comments are closed.