China’s stocks fell on September 14 after economic data released on the previous day underlined fears growth is slackening.
Growth in both fixed-asset investment, up 10.9% in August from a year ago, and factory output, at 6.1%, came in below expectations.
The Shanghai Composite index closed down 2.67% at 3,114.80, while Hong Kong’s Hang Seng was flat, up just 0.16% at 21,538.97.
The Shanghai index has lost nearly 40% since its peak in mid-June.
Shares of four of China’s largest brokerages tumbled as much as 7% following news of fines and penalties from the securities regulator for failing to conduct proper checks on clients.
The four were fined 178.5 million yuan ($28 million) and had 62.4 million yuan of profits confiscated, according to the securities filings by the companies.
Regulators have been cracking down on trading firms to stem the volatility that has rocked the markets for the past few months.
Photo Getty Images
The rest of Asian shares traded mixed, despite Friday’s positive finish on Wall Street, with investors cautious in advance of the Federal Reserve meeting this week.
All eyes are on the US policy meeting, which ends with a decision on September 17 on whether to raise interest rates for the first time in almost a decade.
Economists are split on whether the long-awaited move will happen.
Japan’s benchmark Nikkei 225 index finished down 1.6% to 17,965.70 points.
Japanese investors are also looking ahead to the conclusion of the Bank of Japan’s two-day policy meeting on Tuesday, where they are expected to maintain their easing program.
In Australia, the benchmark S&P/ASX 200 closed up 0.6% to 5,102.30.
Shares in Oil Search reversed earlier losses to close up 0.2% after it rejected an $8 billion takeover proposal from Australia’s biggest energy company Woodside Petroleum, saying the offer was too cheap.
South Korea’s benchmark Kospi ended down 0.5% to 1,931.46.
According to latest figures, growth in China’s investment and factory output in August 2015 has come in below forecasts, in a further indication that the world’s second-largest economy is losing steam.
Factory output grew by 6.1% from the year before – below forecasts of 6.4%.
Growth in fixed-asset investment – largely property – slowed to 10.9% for the year-to-date, a 15-year low.
Growing evidence that China’s economic powerhouse is slowing down has caused major investment market falls.
Other indications that China’s economy is weakening can be seen in falling car sales and lower imports and inflation.
Chinese manufacturers cut prices at their fastest pace in six years, largely on the back of a drop in commodity prices, which have dropped sharply over the past year as demand from China faltered.
Last week, Chinese PM Li Keqiang, said his country remained on track to meet all its economic targets for this year despite the economic data.
China has already cut interests rates five times since November 2014 to encourage lending and spur economic activity, along with other measures to boost growth.
PM Li Keqiang pledged that China would take more steps to boost domestic demand and that it would implement more policies designed to lift imports.
China recently revised down its 2014 growth figures from 7.4% to 7.3% – its weakest showing in nearly 25 years.
For 2015, the Chinese government is targeting annual economic growth of about 7%.
Meanwhile, the Chinese authorities said they would take new steps towards a more market-based economic system by offering shares in state-owned businesses to private investors.
The move, which they said would help improve corporate governance and asset management, is planned to take place before 2020.
China’s industrial economy is dominated by 111 conglomerates which are state owned.
According to latest trade figures, China’s August imports fell 14.3% in yuan-denominated terms from a year ago, while exports fell by 6.1%.
The steep fall in the value of imports reflects lower commodity prices globally, particularly crude oil.
The numbers mean China’s monthly trade surplus expanded by close to 40% from the month earlier to 368 billion yuan ($57.8 billion).
China recently revised down its 2014 economic growth from 7.4% to 7.3%, its weakest for almost 25 years.
In US dollar denominated terms, exports for the month of August fell 5.5% from a year earlier – slightly less than expected – while imports fell by 13.8%, leaving China with a surplus of $60.24 billion.
Currency conversion factors based on US dollar and Chinese yuan movements over the last year mean some official numbers from the mainland are now reported in both currencies.
A fall in both import and export figures had been expected as China’s economy slows, though analysts said the drop in imports was greater than forecast.
The Chinese markets were volatile for much of September 7 as mainland stock exchanges reopened following a four-day weekend.
The Shanghai Composite traded erratically, but closed down by 2.5% to 3,080.42 points.
The market volatility in China came as the country’s National Bureau of Statistics revised its annual economic growth rate for 2014 to 7.3%, down from 7.4%.
Hong Kong’s benchmark Hang Seng index closed down 1.2% to 20,583.52.
Mainland shares have fallen 40% since mid-June when the sell-off began, while Chinese regulators continue to take more steps to stabilize erratic trading.
China’s central bank governor, Zhou Xiochuan, told financial leaders at the G20 summit over the weekend that the markets had almost completed their correction after a steep rise in the first half of the year.
Photo Getty Images
“The stock market adjustment is already roughly in place and financial markets can be expected to be more stable,” Zhou Xiochuan said in a statement from Turkey.
Other Asian markets were mixed on September 7 despite stocks in the US, which headed lower on before weekend after US jobs figures were released.
Friday’s much-anticipated jobs figures showed unemployment fell to 5.1% last month, the lowest since April 2008.
The jobs report is the last before the Federal Reserve meets later this month to decide whether to increase interest rates.
Japan’s benchmark Nikkei opened lower on September 7, down 0.65%, but finished the day closing up 0.38% at 17,860.47.
In Australia the S&P/ASX 200 closed down 0.2% at 5,030.40, while South Korea’s Kospi benchmark index closed down 0.15% at 1,883.22 points, after closing down 1.5% on September 4.
Japan stock market closed higher for the first time in four days, spurred by a rally on Wall Street.
US shares snapped a two-day losing streak overnight, rebounding from Tuesday’s steep losses as the S&P 500 and Dow Jones rose nearly 2%.
An upward revision in US productivity data ahead of the jobs report on September 4 boosted sentiment among investors rattled by slowing growth in China.
Photo AFP/Getty Images
Japan’s Nikkei 225 index closed up 0.5% to 18,182.39 – leading Asian gains.
Chinese markets are closed on September 3 and 4 for a holiday to commemorate the end of World War II.
In Australia, the S&P/ASX 200 index ended down 1.3% at 5,035.70. Shares in department store operator Myer Holdings dived 24% after it announced plans to raise 221 million Australian dollars ($154 million) through a rights issue.
In South Korea, shares closed flat after revised second quarter growth figures came out in line with earlier estimates released in July.
The country’s economy grew a seasonally-adjusted 0.3% from April to June from the previous three-month period, while it expanded 2.2% from a year earlier.
South Korea’s benchmark Kospi index finished at 1,915.53.
Global stock markets have been hit by renewed fears over China’s economic growth, with the main indexes falling sharply.
Wall Street traded sharply lower, with the Dow Jones down more than 300 points, or 1.9%, at 16,215.
European markets also fell, with the London’s FTSE 100 closing down 3% and France’s CAC 40 and Germany’s DAX about 2.4% lower.
Earlier, figures for August showed China’s manufacturing contracted at its fastest pace in three years.
The official manufacturing purchasing managers’ index (PMI) dropped to 49.7 from 50 in July. A figure below 50 indicates contraction.
It follows recent turmoil in the markets sparked by concerns over a slowdown in the world’s second-largest economy.
Energy companies led the way down on the Dow, with Chevron and Exxon Mobil down about 3%. This followed a fall in the oil price, which was down more than 4% at $51.89.
Before Tuesday’s fall, the price of oil had risen by about 25% in the past three trading sessions.
The S&P 500 was also down about 2% at 1,934.18, while the tech-heavy NASDAQ was 1.6% lower at 4,699.21.
Global markets sustained heavy losses in August – for both the UK’s FTSE 100 and the US’s S&P 500, it was the worst month since May 2012.
As well as the weak China factory data, investors are unsure about the US Federal Reserve’s next move. Many had penciled in the a rate rise – the first move since the financial crisis – for September. However, given the recent stock turmoil, analysts seem less certain.
According to fresh economic data, the Chinese factory activity contracted at its fastest pace in three years in August, confirming the slowdown in the country’s economy.
The official manufacturing purchasing managers’ index (PMI) dropped to 49.7 from 50 in July.
A figure below 50 indicates contraction.
The weak data is likely to add to global concerns over China’s economy losing steam and could send Asian and global shares down further.
A separate private Caixin/Markit index also released on Tuesday puts the PMI number even weaker, at 47.3, the weakest reading since 2009.
The fresh economic data is also likely to undermine efforts by Beijing to reassure investors and calm markets.
Chinese mainland stocks have been on a steep downward slope over the past months, shedding almost 40% since June.
Authorities have injected money into the markets, allowed the state pension fund to start buying up shares and lowered lending rates.
So far though, none of those measures have managed to push the markets back into positive territory and analysts have warned that the more Beijing’s intervention fails to have an impact, the more likely it is that future ones will be shrugged off by investors.