HONG KONG- Asian stocks stumbled on Wednesday, as more disappointing Chinese economic data and the absence of meaningful stimulus from Beijing continued to weigh on investor sentiment.
Europe is poised to open lower for another day with FTSE futures down 0.15 percent. E-mini futures for the S&P 500 index were largely flat.
MSCI’s gauge of Asia Pacific stocks outside Japan widened losses to decline 1.17 percent to an 11-week low.
China’s new home prices fell for the first time this year in July, data showed Wednesday, the latest in a string of downbeat numbers that point to a rapid loss in economic momentum and underline the urgency for more bolder policy support to shore up activity.
On Tuesday, China reported weaker than expected July activity data, which was followed by news that Beijing would no longer publish youth unemployment data, which further rattled confidence in Beijing.
The PBOC also unexpectedly lowered its policy rate on Tuesday, earlier than many investors had expected. That move followed a string of disappointing data on loans and credit, the housing market and trust industry as well as the threat of deflation.
“Investors’ sentiment toward China is pretty bad,” said Redmond Wong, Greater China market strategist at Saxo Markets.
Wong was most concerned about month-to-month decline in China’s retail sales and weak infrastructure investments, which suggested a lack of local government funding.
China and Hong Kong stocks extended declines with the Hang Seng Index down as much as 1.39 percent and China’s blue-chip CSI 300 Index 0.45 percent lower.
“We think the Chinese Central bank is not going hard enough on reducing interest rates, encouraging the banks to lend more and stimulate very flat consumer activity,” said John Milroy, an investment adviser at Ord Minnett.
Japan’s Nikkei 225 index slipped 1.3 percent to a two-month low with banking shares down after a report from ratings agency Fitch on a possible downgrade of US major banks.
