China stocks lose most in a month as lowest GDP growth on record fuels fears of long-term slowdown
- China’s third-quarter GDP growth, at 6.0 per cent, was the lowest on record and fuelled doubts about the efficiency of government stimulus measures
- Property companies and banks pulled the Hang Seng Index lower, but the Hong Kong benchmark still gained 1.5 per cent on the week
Both the Shanghai Composite Index and the CSI 300, which tracks blue chips listed in Shenzhen and Shanghai, dropped the most in a month on Friday, as China’s third-quarter GDP growth at 6.0 per cent, the lowest on record, fuelled concerns about the state of the economy.
The Shanghai Composite Index slid 1.3 per cent, finishing the day at 2,938,14, while the CSI 300 closed 1.4 per cent lower at 3,869.38.
In Hong Kong, property developers and financial firms led the Hang Seng Index down 0.5 per cent to 26,719.58. For the week, however, the benchmark gauge rose 1.5 per cent.
Xu Lei, an analyst with Shenwan Hongyuan Securities based in Shanghai, said investors were beginning to fear that GDP growth, which has fallen in every quarter since the beginning of the year, is reflecting the fact that the various economic stimulus and supportive monetary measures launched by the government and central bank are having a limited effect.
“There is even some speculation that in 2020, GDP growth could dip below 6 per cent. With 80 per cent of the [domestically-listed] companies still engaged in the traditional economy and representing small-to-medium enterprises, China’s economic slowdown has already begun to be reflected in their third quarter results and over the medium term,” said Xu.
China’s first-quarter GDP growth was 6.4 per cent, falling to 6.2 per cent in the second quarter.
