China, Hong Kong stocks fall on weak economic data, new property rules
SHANGHAI: China and Hong Kong stocks slipped on Monday as fresh economic activity data highlighted persistent economic imbalances, while new rules to overhaul Beijing’s housing presales system weighed on real estate shares. The blue-chip CSI300 Index was down 0.8% by the midday break, while the Shanghai Composite Index lost 0.2%. In Hong Kong, the Hang Seng Index declined 0.7%. Official data released on Monday showed that China’s factory activity improved in August on stronger demand but remained in contraction for a second consecutive month. Meanwhile, services and construction activity remained weak, underscoring deepening imbalances in the economy. UBS Securities Chief China Economist Yu Song expected a round of additional support later in the year, citing “more obvious risks of not reaching the annual growth target”. Market sentiment was further dampened by a selloff in property shares after China on Friday rolled out measures to reduce developers’ dependence on presale funds. “The effort to shrink the presales system will lead to a decline in housing starts,” Zhang Xiaoxi, analyst at Gavekal Dragonomics said in a note. Presales still accounted for about 75% of new housing sale
SHANGHAI: China and Hong Kong stocks slipped on Monday as fresh economic activity data highlighted persistent economic imbalances, while new rules to overhaul Beijing’s housing presales system weighed on real estate shares. The blue-chip CSI300 Index was down 0.8% by the midday break, while the Shanghai Composite Index lost 0.2%. In Hong Kong, the Hang Seng Index declined 0.7%. Official data released on Monday showed that China’s factory activity improved in August on stronger demand but remained in contraction for a second consecutive month. Meanwhile, services and construction activity remained weak, underscoring deepening imbalances in the economy. UBS Securities Chief China Economist Yu Song expected a round of additional support later in the year, citing “more obvious risks of not reaching the annual growth target”. Market sentiment was further dampened by a selloff in property shares after China on Friday rolled out measures to reduce developers’ dependence on presale funds. “The effort to shrink the presales system will lead to a decline in housing starts,” Zhang Xiaoxi, analyst at Gavekal Dragonomics said in a note. Presales still accounted for about 75% of new housing sale
