Chinese equities extended their declines after the nation reported slower growth in the third Quarter, with markets there underperforming compared with broad gains across the Asia-Pacific region.
Data released Thursday showed China’s economic expansion slowed to 6.8% in the third quarter, down from 6.9% in the second quarter, as Beijing’s efforts to clamp down on off-balance sheet lending and corporate leverage weighed on growth.
Both the Shanghai Composite Index and the Shenzhen main board were last down 0.4%. In Hong Kong, the Hang Seng Index was down 0.1%, after opening higher.
While the third-quarter growth numbers met expectations, markets were nonetheless positioned for an upside surprise, after Chinese central bank Gov. Zhou Xiaochuan predicted the economy would touch the 7% growth rate in the second half of this year.
“Traders may position for further weakness into the year-end, suspecting financial curbs will continue to have a negative impact on growth in China,” said Stephen Innes, head of trading for Asia at Oanda.
But with the key Chinese Communist Party Congress in session this week, there was pressure to maintain market stability, say analysts, and they expect some last minute buying through state-owned funds to prop up shares.
The Wall Street Journal
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