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Writer's pictureBy The Financial District

Chinese Stock Traders Mull Just How Bad The Economy Can Get

A slew of poor economic data from China is deepening pessimism among equities traders wondering what it will take for authorities to initiate forceful stimulus, Abhishek Vishnoi and Winnie Hsu reported for Bloomberg News.


Concern that Beijing doesn’t have the willingness to turn things around has weighed on the nation’s equities. I Photo: GG001213 Wikimedia Commons



Figures released Saturday showed Chinese factory output, consumption, and investment all slowed more than forecast for August, and the jobless rate unexpectedly rose to a six-month high. Home prices declined from the previous month.


“The fear is that the authorities are losing control of the economy and they won’t admit it,” said Gary Dugan, chief executive officer of the Global CIO Office.



“The market looks set to go to significantly lower levels in the absence of real, substantial new policies.”


Concern that Beijing doesn’t have the willingness to turn things around has weighed on the nation’s equities. The CSI 300 Index fell to its lowest since early 2019 last week.


In Hong Kong, the Hang Seng China Enterprises Index has dropped 13% from a high in May.



Any reaction in Chinese stocks on Monday will be focused on Hong Kong, with mainland financial markets closed until Wednesday due to holidays. Authorities have shown a reluctance to unleash large-scale fiscal stimulus ever since they acted to deflate a property bubble, which has led to the current crisis.




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