China Stocks Show Little Reaction To Economic Data

Hong Kong stocks edged higher, while Shanghai shares moved solidly lower in early Wednesday trading, as the markets largely shrugged off Chinese economic data that printed a little above expectations. Statistics released a half-hour after the start of trade showed second-quarter economic growth at 7% from a year earlier, beating a consensus forecast for a 6.8% gain in a Wall Street Journal survey. June industrial production (up 6.8% on year) and retail sales (up 10.6%) also exceeded projections. But about 10 minutes after the data release, the main Chinese stock markets showed little difference with their pre-data levels, with Hong Kong's Hang Seng Index up 0.2%, and the Shanghai Composite Index down 1.6%. However, major mainland Chinese banks traded broadly higher despite showing losses earlier in the trading session. Industrial & Commercial Bank of China Ltd. rose 0.3% in Hong Kong and 0.8% in Shanghai, while China Construction Bank Corp. improved by 0.6% and 1.8% in Hong Kong and Shanghai respectively. Among decliners in Hong Kong, Angang Steel Co. dropped 2.7% after posting weak first-half profit numbers, while a warning of an up-to-80% plunge in six-month net profit for Weichai Power Co. sent those shares down almost 12%. In Shanghai, separate data showing an acceleration in housing sales helped lift Gemdale Corp. by 1.2%, but heavy losses for many resource stocks (Aluminum Corp. of China Ltd. down 4.5%) and airlines (China Eastern Airlines Corp. down 6%) weighed on the broader market.