China presented its latest economic report card this morning, and the results were well short of expectations.
The data sent another wave of jitters through Asian markets, as the microcap ASX Emerging Companies index moved into the red after opening around 0.5% higher.
China data — the breakdown
Once a month, Chinese authorities present a tri-data package comprised of industrial production, retail sales and unemployment figures.
All three measures missed forecasts, with industrial production (+6.4%) rising at the lowest monthly rate since August 2020.
“These are poor numbers that are likely to spook broader markets,” said ForexLive analyst Adam Button, adding falls were likely to be exacerbated in commodities and commodity-linked currencies.
On Hong Kong’s Hang Seng Index, the data miss prompted more sharp falls in heavyweight tech stocks including Tencent Holdings, which fell more than 3% in intra-day trade and has now fallen by more than 20% since July 1.
Over the same time frame, the US-listed shares of Chinese ecommerce giant Alibaba have fallen by around 18%.
As another gauge of risk sentiment, the Aussie dollar fell to a two-week low against the Japanese yen.
On currency markets, the AUD is often viewed as a proxy for risk-on appetite while the yen is viewed as a safe-haven currency — another indicator that markets are re-assessing the outlook for commodity prices and the effect of extended domestic lockdowns.
In presenting the data, China’s stats bureau said they reflect the fact that China’s recovery from the pandemic remains uneven, and flagged a more complex outlook in the second half of the year due to lingering global complications from COVID-19.
Separately, Chinese authorities released monthly house price data which showed real estate prices rose by 4.6% in July, down slightly from 4.7% in the month prior.
Accompanying the downturn on local market, US stock futures are also negative, with the S&P500 futures index a short time ago pointing ~0.3% lower ahead of the Monday open.
On the ASX 200, falls were led by Energy stocks after oil prices fell again on Friday night on demand concerns “linked to the spread of the highly-transmissible delta variant of COVID-19”, CBA analyst Vivek Dhar said.
“Restrictions on mobility remain the primary concern for oil markets given that transportation accounts for two-thirds of global oil demand.”