Asian Equities Fall as China’s Economy Stagnates – Asia Market Wrap

Asian stocks slipped lower following four months of gains, as China’s efforts to assist its struggling economy showed no indications of success.

A gauge of the region’s stocks plummeted on the opening day of trading in a traditionally tumultuous month for markets. In Hong Kong, the benchmark index fell about 2%, with New World Development shares down as much as 14% after the indebted property developer announced it anticipated making its first annual loss in two decades.

US index futures also fell, implying that the S&P 500 may reverse its gains after finishing higher on Friday, as data bolstered predictions of upcoming Fed rate cuts. The Dollar remained constant as cash. Treasuries were closed globally on Monday in observance of the US Labour Day holiday. Australian government bond yields increased.

Global funds expect major central banks, including the Fed, to cut interest rates in September, while multiple rounds of stimulus have failed to revive growth in China, where a prolonged property market slump is dampening domestic demand in the world’s second-largest economy. While Caixin China manufacturing statistics showed an unexpected gain on Monday, it failed to change sentiment after an official barometer of Chinese industrial activity fell for the fourth consecutive month in August.