China's stocks were at their lowest in three weeks on Monday after lukewarm data over the weekend suggested that the world’s second largest economy is slowing.
The Shanghai Composite index dropped more than 4 per cent during trading put pulled back to close down 2.7 per cent lower, while the Shenzhen Composite, which is more tech focussed, was down 6.7 per cent by close.
Retail data showed that sales in China rose 10.8 per cent year-on-year to August, up from 10.5 per cent growth in July. But that wasn’t enough to cheer investors after industrial output missed expectations, growing 6.1 per cent instead of the expected 6.4 per cent.
Falling car sales and lower imports in China have also raised fears of a slowdown.
European investors resisted panic, however, as the FTSE 100 opened up 0.75 per cent, in a sign that investors are less willing to jump on China fears after Black Monday on August 24, when a tumble in Chinese stocks knocked trillions off global equity markets.
"Although Premier Li Keqiang remains defiant that expectations of a 7% growth rate for China is achievable, the recent data from China has outlined nothing other than a deep economic downturn and there are already fears that the China data is much weaker than official statistics illustrate," said Lukman Otunuga, research analyst at FXTM.
The Chinese government has already revised down its 2014 growth figures from 7.4 per cent to 7.3 per cent, the weakest in decades. The 2015 growth target is 7 per cent.Reuse content