KWEB - Chinese stocks tumble on weak China data - report

2023-08-08 12:29:00 ET

Chinese stocks including Alibaba ( NYSE: BABA ) and Nio ( NIO ) fell on Tuesday after weak economic data came out of China.

China's imports contracted by 12.4% in July, more than forecast of a 5% decline. Exports decreased by 14.5%, compared to a fall of 12.5% expected by economists, Reuters reported .

Global stocks were not left untouched. The pan-European STOXX Europe 600 Index( STOXX ) dipped -0.6%, the Global X DAX Germany ETF ( DAX ) fell -1.86%, while Britain's FTSE 100 declined -0.79%. The KraneShares CSI China Internet ETF ( KWEB ) and the Invesco Golden Dragon China ETF ( PGJ ) are down about 3%.

Bank stocks also came under pressure after Italy approved a windfall tax on lenders and Moody's cut credit ratings on multiple small and mid-sized banks.

The grim trade figures reinforce expectations that economic activity could slow even more in Q3, with construction, manufacturing and services activity, foreign direct investment and industrial profits all weakening, as per a report .

The speed of export decline was the fastest since the start of the pandemic in early 2020 and the decrease in imports was the largest since January this year, when COVID brought lockdown of factories, according to the report.

While the weakness in the value of imports suggests poor demand, decrease in commodities prices have also worsened the headline declines, as per analysts.

"Most measures of export orders point to a much greater decline in foreign demand than has so far been reflected in the customs data," said Julian Evans-Pritchard, head of China economics at Capital Economics, acording to news agency.

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