China's Economic Puzzle: Stocks Drop Amid Growth Woes and Property Challenges
China's stock markets react to economic slowdown in Q2 despite exceeding forecasts. The property sector remains weak, affecting overall growth. CSI300 Index fell 0.5%, while Hong Kong shares inched up. Analysts credit export strength for avoiding a sharp slowdown but note ongoing challenges in consumption and housing.
On Tuesday, China's stock market experienced a decline with the blue-chip CSI300 Index dropping 0.5% and the Shanghai Composite Index losing 0.9%. In contrast, Hong Kong shares saw a slight increase as the economy slowed down in the second quarter, blending mixed signals within the market.
China's GDP growth in the April-June quarter was recorded at 5.2%, slightly above market predictions but a slowdown from the first quarter's 5.4%. Despite resilient exports and a trade truce with the U.S., the property sector's struggles continue to pose a significant challenge, with investment dropping 11.2% year-on-year in the first half.
Economists foresee limited stimulus measures from policymakers, focusing on targeted easing to address the persistent property downturn and increasing labor market concerns. Meanwhile, technological sectors like cloud computing saw a boost with Nvidia's decision to resume AI chip sales to China.
(With inputs from agencies.)
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