SHANGHAI: China and Hong Kong stocks slipped on Monday as a slew of lacklustre economic data and mounting default risks by property developer Vanke weighed on market sentiment.
Both China’s blue-chip CSI300 Index and the Shanghai Composite Index ended down 0.6 percent. Hong Kong’s Hang Seng dropped 1.3 percent.
Property shares sank after bondholders rejected China Vanke’s initial plan to push back payment by a year, raising the risk of default for the state-backed developer and renewing concerns about China’s crisis-hit property sector.
Risk appetite was further curbed by data that signalled China’s economy had stalled in November.
New home prices extended declines last month, China’s factory output and retail sales grew at their weakest pace in over a year, and new bank loans rose less than expected.
“Economic activity indicators weakened across the board in November,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management. “The soft retail sales number is particularly worth watching. The contraction of fixed asset investment and the drop of property prices in recent months have been transmitted to the consumer sentiment.”
Investors were also left disappointed by measures announced over the weekend to stimulate consumption, which lacked substance.
“We think the time is coming for ending deflation, truly cleaning up the property mess, and boosting consumption demand via reforming the social welfare system,” said Lu Ting, chief China economist at Nomura.
Shares of Vanke slumped 5 percent in Hong Kong and 3 percent in Shenzhen.
China’s CSI 300 Real Estate Index fell 2.1 percent, flirting with record-low levels. In Hong Kong, the Hang Seng Mainland Property Index softened nearly 1 percent.
China’s SSE STAR Chip Index fell more than 3 percent after reports that AI giant Nvidia is considering expanding production of its H200 chips following strong Chinese orders.
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