Greater China equities take a beating after economic numbers disappoint

Markets in Greater China slumped on Friday, following worse-than-expected economic data on industrial output and retail sales for the month of November. Also, as it was the end of the trading week, some investors took the chance to take their earnings off the table after experiencing an improved week of equities performance boosted by positive developments seen from the United States (US)-China trade truce.

At around 3.20pm Hong Kong time, the Shanghai Composite Index was down by 1.53% or 40.31 points, at 2,593.74, while the Hang Seng Index sank 1.57% or 451.54 points, at 26,108.81. China’s smaller Shenzhen Composite Index was lower by 2.46% or 33.51 points, at 1,327.42.

Other Asian markets also registered declines. At around the same time of the day, Singapore’s Straits Times Index dove 1.03% or 31.89 points, at 3,079.19. Tokyo’s Nikkei 225 closed the week’s session down 2.02% or 441.36 points, at 21,374.83 and the Topix index sank 1.51% or 24.49 points, at 1,592.16.

China’s November industrial output, retail sales below expectations

According to data from the National Bureau of Statistics, industrial output data for November rose 5.4%, lower than the 5.9% growth economists in a Reuters poll expected.

Retail sales rose 8.1% last month, slowing down from the 8.6% growth in October. Analysts had expected an 8.8% rise. Retail sales have been weak for the slowing economy this year, with auto sales particularly hurt from the weak retail growth.

US-China’s trade truce making progress

Earlier in the week, markets traded positively after receiving developments and assurance that trade talks were underway between the US-China.

Optimism on the Sino-US trade grew after US President Donald Trump said trade talks with China were progressing and discussions were underway.

In a Reuters report on Wednesday, it said Chinese state-owned companies have bought more than 1.5 million tonnes of US soybeans within that day, making it the first major US soybean purchase in more than six months.

As part of the trade truce talks between both countries, Mr Trump had agreed to put a hold on new tariffs while China President Xi Jinping said the country would ramp up on purchases of American products.