Chinese stocks fell almost 1% on Monday, their biggest loss in three weeks and dragging the broader MSCI Asia ex-Japan index into the red for the first time in six sessions.
No such issues on Wall Street as a near 1% rally in the tech-centric Nasdaq lifted stocks while the U.S. earnings season goes up a gear this week. There was barely any change in the dollar or Treasury yields on Monday as investors brace for U.S. retail sales figures on Tuesday.
The shadow over local markets cast by China’s second quarter GDP data on Monday is unlikely to lift completely by Tuesday, and the pressure on policymakers in Beijing to deliver more stimulus to shore up activity will surely increase.
Chinese GDP grew 0.8% in April-June from the previous quarter, beating the consensus forecast of 0.5%. But on a year-on-year basis, GDP expanded 6.3%, well below the 7.3% forecast.
JPMorgan, Morgan Stanley and Citigroup trimmed China’s growth forecast for 2023 to as low as 5%, with Morgan Stanley also trimming its 2024 GDP forecast by 40 basis point to 4.5%.
