(Bloomberg) — A gauge of Chinese stocks listed in Hong Kong fell after broadly weaker macro data dashed optimism of a meaningful rebound in the economy in the absence of comprehensive stimulus.
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The Hang Seng China Enterprises Index dropped as much as 1.3%, snapping a two-day gain. Alibaba Group Holding Ltd. and China Construction Bank Ltd. both dropped more than 1%. Mainland equity markets are shut until Wednesday for holidays.
Manufacturing, consumption and investment all slowed more than economists forecast, while the jobless rate rose, data showed Saturday. Failure to achieve the nation’s annual growth target may further undermine investor confidence, with overseas funds already pulling a record amount of money out of the country in the second quarter.
A rebound in the nation’s equities earlier this year has lost momentum, with the CSI 300 Index closing at its lowest since 2019 last week. Declines may increase in absence of a forceful stimulus.
“The recent Chinese economic data paints a grim picture, with key indicators missing expectations and signaling heightened uncertainty for China equities,” said Manish Bhargava, chief executive officer at Straits Investment Management. “Weak domestic demand and sluggish industrial production continue to weigh on corporate earnings potential.”
While aggressive stimulus may offer a short-term boost to equities, the authorities’ incremental measures to date have raised “doubts about the potential scale and effectiveness of future intervention,” he said.
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