China stocks fell on Monday tracking subdued global markets, after U.S. Federal Reserve Chair Jerome Powell signalled continuing on an aggressive interest rate hike path, while domestic economic concerns also weighed on sentiment. ** The CSI 300 Index lost 0.6% at the end of the morning session, and the Shanghai Composite Index slipped 0.1%.
** The Hang Seng Index fell 0.7%, and the Hang Seng China Enterprises Index dropped 0.6%. ** Asian shares slid, tracking Wall Street weakness on Friday after Powell said the U.S. economy will need tight monetary policy “for some time” before inflation is under control.
** Profits at China’s industrial firms sank in July, reversing previous gains as fresh COVID-19 curbs dragged down demand, while power shortages due to heatwaves threatened production. ** To revive the economy and expand credit growth, China’s central bank has stepped up pressure on lenders with new instructions to grow loans, sources told Reuters.
** Real estate developers tumbled more than 2%, banks retreated 1.5%, and coal miners lost 1.2%. ** Defence stocks and photovoltaic industry added roughly 2% each.
** Beijing and Washington took a major step on Friday towards ending a dispute that threatened to boot Chinese companies from the U.S., signing a pact to allow U.S. regulators to vet accounting firms in China and Hong Kong. ** U.S. officials, however, warned it was just a first step and their view on China’s compliance would be determined by whether they are able to conduct their inspections unobstructed as the deal promises.
** “It’s too early to conclude the ADR delisting risk is over,” said J.P.Morgan analysts in a note. “We believe what really determines ADR delisting risk is how successful the first batch of PCAOB will be in the next few months.” ** Hong Kong’s tech index shed 0.9%, with most constituents down.
** Food delivery company Meituan jumped more than 4%, after it reported better-than-expected quarterly revenues.
