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China's stocks rise as data shows lowest quarterly growth in 27 years

Lisa Micheal 3 Jul 14

Chinese stocks recovered from an earlier slip to finish the trading day higher on Monday, following the release of GDP data that showed the Chinese economy growing at its slowest pace in at least 27 years.

The Shanghai composite added 0.4% to 2,942.19, while the Shenzhen component rose 1.04% to 9,309.42. The Shenzhen composite also gained 1% to 1,572.34.

Hong Kong's Hang Seng index added 0.22%, as of its final hour of trading, with the city still stuck in turmoil surrounding a controversial extradition bill. Meanwhile, the Budweiser initial public offering in Hong Kong, which was set to be the world's biggest listing of 2019, was canceled by parent company Anheuser-Busch InBev.

Elsewhere, South Korea's Kospi ended the trading day in Seoul 0.2% lower at 2,082.48.

Over in Australia, the S&P/ASX 200 declined 0.65% to close at 6,653.00 as most sectors slipped. Shares of wealth manager AMP plunged 15.81% after the company said it was "highly unlikely to proceed " with the sale of its life insurance and wealth protection business.

overall, the MSCI Asia ex-Japan index rose 0.28%.

Markets in Japan were closed on Monday for a holiday.

China released second-quarter figures on Monday showing that its economy slowed to 6.2% — the weakest rate in at least 27 years.

From April to June, China's economy grew 6.2% from a year ago, the country's statistics bureau said on Monday. That was in line with analysts polled by Reuters.

"With GDP growth dipping towards the government's 6% floor, government policy will remain pro-growth over the remainder of this year and into 2020. This will make subsequent policy tightening all the more challenging," Tom Rafferty, principal China economist at The Economist Intelligence Unit, wrote in a note.

"We know that the Chinese economy is slowing, it's rebalancing towards more domestic growth, away from the manufacturing," Colin Graham, chief investment officer of multi-asset solutions at Eastspring Investments, told CNBC. "We see the authorities really sort of putting the brakes on the economy and then when it goes too far they'll release the brakes."

That comes amid increasing expectations that the U.S. Federal Reserve will cut interest rates at its monetary policy meeting later this month. Market expectations for lower rates currently sit at 100%, according to the CME Group's FedWatch tool.

The major indexes on Wall Street posted solid gains last week amid testimony from the top Fed official signaling that a rate cut was coming. The Dow Jones Industrial Average ended its trading week at a record high, while the S&P 500 notched its first close above 3,000.