Asian Stocks Sag As China’s Economy Skids

Asian shares edged lower after four months of gains, as China’s efforts to support its ailing economy showed no signs of taking hold, Catherine Bosley, Winnie Hsu, and Joanna Ossinger reported for Bloomberg News.

New World Development Co. fell as much as 14% after the property developer said it expected to post its first annual loss in two decades.

A gauge of the region’s stocks fell, marking the first day of trading in a typically volatile month for markets.

In Hong Kong, the benchmark index declined almost 2%, with shares of New World Development Co. falling as much as 14% after the property developer said it expected to post its first annual loss in two decades.

US index futures also slipped, suggesting the S&P 500 could reverse gains after closing higher on Friday, as data supported expectations of pending Federal Reserve rate cuts.

The dollar was steady as cash Treasuries were closed globally Monday for the US Labor Day holiday. Australian government bond yields rose.

Global funds are positioning for major central banks, including the Federal Reserve, to reduce interest rates this month, while multiple rounds of stimulus have failed to revive growth in China, where a prolonged property market slump is curbing domestic demand.

Although the Caixin China manufacturing data registered an unexpected increase on Monday, the move failed to reverse sentiment after a gauge of Chinese factory activity contracted for a fourth straight month in August.

“I would be more worried about the China side of the equation, to be quite frank,” Carlos Casanova, a senior Asia economist at Union Bancaire Privée, told Bloomberg TV. 

While the last quarter is likely to be positive for Chinese risk assets thanks to efforts to shore up domestic demand, “there’s not enough policy space to do big bazooka support measures like in 2009,” he added.