Invesing.com- Asian equities continued to fall in afternoon trade on Monday as China reported weaker-than-expected industrial production data.
The country’s industrial output grew 6% year-on-year in June, which was slower than the expected 6.5%. The data showed slowing momentum and prompted analyst to call for stronger government measures to support growth.
On the other hand, official GDP readings were largely in line with market expectations. China’s economy expanded by 6.7% in the second quarter, its slowest pace since 2016, although the growth is still above the government’s target of “about 6.5%” growth for the year.
Beijing’s trade war with the US were cited as headwind for domestic demand. Gross domestic product grew at 6.8% in the previous three quarters.
Retail sales on the other hand rose 9% year-on-year in June, beating the general consensus of a 8.8% increase, although its impact on stock markets seemed to be limited.
"I think it's a little bit tricky at this moment. On the one hand, China commits to financial deleveraging. On the other hand, China sees growth moderation and growth slowdown is a risk for the economy as well," said Hao Zhou, senior emerging market economist for Asia at Commerzbank (DE:CBKG).
Spokesman from the National Bureau of Statistics Mao Shengyong said following the release of the GDP data that trade disputes with the U.S. is not likely to affect China's consumer prices, and consumer spending is expected to remain steady in the second half of the year.
There will be no change to the steady, improving trend in China's economy, Mao added.
In other news, U.S. President Donald Trump played down expectations for the upcoming talks with Russia’s leader Vladimir Putin.
"I go in with low expectations," Trump said in an interview with CBS news on Sunday. "I'm not going with high expectations."
“No matter how well I do at the Summit, if I was given the great city of Moscow as retribution for all of the sins and evils committed by Russia over the years, I would return to criticism that it wasn’t good enough,” Trump said in a series of tweets.
The Shanghai Composite and the Shenzhen Component fell 0.9% and 0.2% respectively by 1:38AM ET (05:38 GMT). Hong Kong’s Hang Seng Index slipped 0.4%.
ZTE Corp (HK:0763) rose as much as 9% in Hong Kong after the U.S. lifted a ban on American companies selling parts to the China-based telecommunications equipment manufacturers.
Meanwhile, Chinese stock exchanges announced that the connect scheme linking Hong Kong and mainland’s exchanges would not extend to firms with weighted voting rights structure, meaning that Chinese investors would be barred from buying shares in certain companies including Xiaomi Corp (HK:1810).
Elsewhere, Australia’s S&P/ASX 200 traded 0.5% lower, and South Korea’s KOSPI slipped 0.4%. Markets in Japan are closed for a holiday on Monday.