Hong Kong’s Hang Seng index started the week in the red after a sharp slowdown in the engine global growth. The index was down more than 171 points on Monday. Japan’s Nikkei 225 index slipped 1.73% despite the positive GDP data. Australia’s ASX 200 index also edged lower. The Shanghai Composite slightly increased while the Shenzhen Component declined.
China’s Economic Concerns
According to data released by the National Bureau of Statistics of China, industrial production and urban investment all missed July’s forecasts. With the recent tightening of the coronavirus restrictions, the declines are likely to get worse.
In July, industrial production grew 6.4% on a year-on-year basis, down by 1.9% from June’s 8.3% gain. It missed the median market forecast for a 7.8% increase. The High-Tech manufacturing industry showed strong momentum of growth in the same month.
The Index of Services Production rebounded in July, albeit at a slower pace. The index came in 7.8% higher on a year-on-year basis, down by 3.1% in June. The Business Activity Index of Services stood at 52.5% in July, which was slightly higher than in June.
Market sales continued to grow as online retail sales grew at a faster pace. With the resurgence of the coronavirus pandemic, many people opted to shop online. Total retail sales of consumer goods climbed 8.5%YoY missing the 11.5% forecast. Online retail sales for physical goods jumped 17.6%n YoY.
The total value of imports and exports of goods in July was up 11.5% YoY. The value of exports rose 8.1% while the value of imports was up by 16.1%.
The investment in fixed assets rose 10.3%, which was weaker than the estimated 11.3%. The growth of investment in manufacturing accelerated.
Hang Seng Movers
China Resources Land was the best performer in the Hang Seng index. China Resources Land is a residential property managers company. The company rose 2.92% on Monday.
Techtronic Industries is an electronics company. The company gained 2.85% in its stock earnings after recently posting exceptional growth in its first half sales. The company’s sales jumped 52% to $6.4 billion. Earnings per share increased 57.8%, while net profit rose 57.9%.
On the flip side, BYD Co Ltd led the drags in the Hang Seng index. The manufacturing company lost more than 7.10% in its stock earnings. However, according to analysts, the company’s value has skyrocketed this year
Geely Automobile was down 6.15% on Monday. The Chinese multinational automotive company recently announced its partnership with Renault to help the French carmaker reestablish its presence in China.