HONG KONG: China stocks struggled for direction on Tuesday as the second quarter economic growth slowed, while a tech rally boosted Hong Kong shares, thanks to Nvidia’s resumption of chip sales to China.
At the close, China’s blue-chip CSI300 Index was flat, while the Shanghai Composite Index lost 0.4%. Hong Kong benchmark Hang Seng climbed 1.6%. Tech giants listed in Hong Kong jumped 2.8%. Data showed China’s gross domestic product grew 5.2% in the April-June quarter from a year earlier, slowing from 5.4% in the first quarter, but just beating analysts’ consensus expectations of a 5.1% rise in a Reuters poll.
Analysts said the US-China trade truce and strong exports helped the world’s No.2 economy avoid a sharp slowdown. Meanwhile, the property downturn remained a drag on overall growth, with investment in the sector falling 11.2% year-on-year in the first six months. In June, China’s new home prices fell at the fastest monthly pace in eight months, highlighting the weak demand. CSI 300 real estate dropped more than 1%, among the worst performers in mainland A-shares. The market didn’t move much as there are offsetting data, said Kai Wang, Asia equity market strategist, Morningstar.
“For the bad news, consumption sales and housing prices, two key areas that required improvement, did not really show us any significant improvement,” Wang said.
However, US tariffs have not affected China’s overall economy as feared thanks to resilient export data, he added. Meanwhile, the news that Nvidia will resume sales of its H20 artificial intelligence chip to China lifted cloud computing, 5G communications stocks.
In Hong Kong, internet giants jumped, with Alibaba and Tencent gaining 7% and 4%, respectively.
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