Chinese stocks were sliding on Wednesday as a fresh batch of bad news weighed on sentiment.
Official data showed new home prices in China’s major 70 cities fell in July, and the yuan held around a nine-month low against the dollar.
That followed a disappointing set of interest-rate cuts from the central bank on Tuesday, as well as fresh signs of a weak economy. There was also news that authorities would stop reporting youth unemployment figures, which had become embarrassingly high.
On top of that,
Goldman Sachs
said that hedge funds are aggressively selling Chinese stocks, and Bloomberg reported that an important financial group, Zhongrong International Trust, had missed interest payments on dozens of products. Property developer Country Garden suspended payments on some of its bonds over the weekend, heightening concerns that China’s financial system is under stress.
“We still expect more policy support to materialize soon, and we retain our constructive view on Chinese equities,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “At the same time, we acknowledge the risk of further disappointment in the near term, delaying the recovery and warranting a more defensive stance.”
The Shanghai Composite Index finished 0.8% lower on Wednesday. Hong Kong’s Hang Seng Index dropped 1.4%.
Some big Chinese stocks with U.S.-listed American depositary receipts fell on Wednesday.
Alibaba
(ticker: BABA) fell 1% in U.S. premarket trading.
JD.com
(JD), which reports earnings later in the day, was 0.4% lower.
Write to Brian Swint at [email protected]
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