Asian Markets Decline, China’s GDP Growth Slows

On Asian markets on Monday, stock prices fell as investors, already concerned about the potential consequences of the trade war between the US and China, were prompted to be cautious by data showing a slowdown in China’s economic growth.

The MSCI Asia-Pacific index, excluding Japan, was down 0.4 percent around 7:00 AM.

Meanwhile, stock prices in Hong Kong, Singapore, Australia, South Korea, and Shanghai fell between 0.2 and 0.5 percent. In Japan, the markets are closed today due to a holiday.

Asian investors were alarmed by the data released this morning indicating that China’s gross domestic product grew by 6.7 percent in the second quarter compared to the same period last year, slower than the 6.8 percent growth seen in the previous three quarters.

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Although the GDP growth is in line with analysts’ expectations, investors were concerned about the weaker-than-expected growth in industrial production.

These data together indicate, analysts say, that economic growth continues to slow under the influence of efforts to limit excessive financial risks, at a time when China faces a trade war with the US.

Indeed, concerns regarding the trade war have somewhat eased following last week’s messages from Washington that the US and China could reopen negotiations if Beijing is willing to make serious efforts to implement structural changes.

However, investors remain cautious as China and the US have held several rounds of negotiations since early May, in which the US is trying to reduce its trade deficit with China of $375 billion, but without results.

Oil prices continued their downward trajectory as fears of supply disruptions diminished. On the London market, the price of a barrel slipped 0.7 percent to $74.80, after falling 2.7 percent last week.

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On the US market, after last week’s drop of nearly 4 percent, the price of a barrel fell further by 0.5 percent to $70.65 this morning.

Caution also prevails in the currency markets, with the exchange rates of the most significant currencies not fluctuating significantly.

The dollar index, which shows the value of the US dollar against the other six major world currencies, is around 94.73 points this morning, while it was 94.74 points at Friday’s market close.

At the same time, the price of the US currency against the Japanese yen rose by 0.1 percent to 112.50 yen.

The dollar is stable against the European currency as well, with the euro exchange rate around $1.1680 this morning, compared to $1.1685 at Friday’s market close.