China Mainland Stocks Drop on Economic Growth Concerns; Hong Kong Trading Halted by Typhoon Warning

Stocks in mainland China experienced a decline following the release of an official report that revealed the country's economic growth in the last quarter fell short of market consensus, alongside a record-high unemployment rate among the nation's youth. Meanwhile, trading in Hong Kong was cancelled due to a typhoon warning.

The Shanghai Composite Index dropped 1.2% to 3,199.17 during the local 11.30 am trading break, effectively erasing almost all of the 1.3% gain made in the previous week. Similarly, the CSI 300 Index fell 1.1%. Among the notable decliners were Longi Green Energy Technology, weakening by 1.4% to 29.63 yuan, and Kweichow Moutai, which retreated 1.3% to 1730.00 yuan. Foxconn Industrial slumped 4% to 26.17 yuan, while Will Semiconductor tumbled 4.7% to 101.57 yuan, and Cambricon Technologies dropped 1.4% to 203.20 yuan.

According to the Chinese government, the country's economy grew at an annual pace of 6.3% in the second quarter, compared to 4.5% in the previous three months. However, this growth rate was slower than the 7.1% estimate by economists, with recent reports indicating a decline in manufacturing. The report also highlighted that the jobless rate for individuals in the 16-24 age group increased to 21.3% in June, up from 20.8% in May.

Kinger Lau, China equity strategist at Goldman Sachs, expressed the view that most onshore investors perceive a low probability of significant or unorthodox stimulus measures, as the government's growth target of "around 5%" is still within reach. Lau added that policy visibility is expected to improve after the Politburo meeting later this month.

In Shenzhen, two stocks made their debut. Singatron Electronic China surged by an impressive 46% to 30.65 yuan, while G. Tech Technology jumped 39% to 43.86 yuan.

Hong Kong's stock exchange operator canceled equity and futures trading due to the government's issuance of the first T8 typhoon warning of the year. The typhoon alarm remained in effect, with a potential downgrade of the signal between 4 pm and 7 pm.

The Hong Kong Observatory raised the typhoon warning to the third-highest level at 12.40 am local time on Monday as Typhoon Talim approached within 300 km (186 miles) of the city. In response to the warning, the trading floor at the gold exchange was shut down, although electronic trading continued as usual.

Other major Asian markets also experienced declines. The Kospi Index in South Korea lost 0.3%, the Nikkei 225 Index in Japan declined by 0.1%, while the S&P/ASX 200 Index in Australia remained relatively unchanged.

By fLEXI tEAM