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China's and Hong Kong'' shares fell as China Q3 GDP exceeded expectations

China's and Hong Kong'' shares fell as China Q3 GDP exceeded expectations

  • Summary of the following
  • China Q3 GDP growth is 4.9%, lower than expectations.
  • MSCI Asia ex-Japan off 0.2%, Nikkei loses 0.3%, MSI Asia out-of-japan of 0.8%, Nippon lose 0.9%.
  • On account of the energy crunch, oil hits new multi-year highs.
  • Bitcoin is well within a century of its all-time high.

Hong Kong and mainland China's equity markets fell on Monday after data showed Chinas economy grew slower than expected in the third quarter, weighing on regional stocks, though losses were capped by hopes of policy support.

Oil prices, meanwhile, reached new multi-year highs, continuing their recent surge amid a global energy crisis, with U.S. crude at soaring seven years and Brent at three years high.

China's gross domestic product (GDP) grew 4.9% in July-September from a year earlier, the lowest rate since the third quarter of 2020, as China battled power shortages, supply bottlenecks and sporadic COVID-19 outbreaks as well as rising worries over the property sector.

Chinese blue chips (.CSI300) were down 1.53%, while the Hong Kong benchmark (HKSI) lost 0.56%, although most of the declines occurred right after the bell, prior to the release of data.

"In response to the disappointing growth numbers we expect in the coming months, we believe policymakers will take more steps to support growth," said Louis Kuijs, Oxford Economics' head of Asia economics.

"We believe that the electricity shortages and production cuts will be less of a problem later in Q4. " In line with our expectations, senior policymakers have begun to emphasize growth, and we expect them to start calling for the achievement of climate targets on a more measured timeline.

The weaker-than-expected data weighed on regional benchmarks. MSCI's broadest Asia-Pacific index outside Japan (.MIAPJ0000PUS) was last down 0.2%, while Japan'' Nikkei (.00N225) lost 0.3%. The S&P 500 e-minis, which trades futures in the United States, were steady.

The Asian losses follow after stocks around the globe (.MIWD00000PUS) finished last week in a positive mood, posting their highest day in five months on Friday, fueled by strong U.S. corporate earnings reports, although rising oil prices kept inflation fears alive and raised government bond yields.

Investors, meanwhile, continue to fret over inflation, driven by a reopening from COVID-19 and supply chain concerns, said Shane Oliver, chief economist at AMP. He pointed as an example to New Zealand, which reported tainted consumer price indexes rose 2.2% in the third quarter, the fastest pace in over ten years.

"But in the last two weeks, share prices have been shrugging off most things," he added.

Analysts at CBA said they expect US interest rates to rise as inflation increases, bolstering the dollar, which "has further upside on our view".

The yield on benchmark 10-year Treasury notes rose as high as 1.5930% on Monday, returning to the four-month high of 1.6310% reached early Tuesday, before a tumultuous week later this week.

The pound could gain against the dollar this week, as "UK economic and inflation dynamics support the upward shift to UK interest rates", according to the CBA analysts.

Most currencies were quiet in early trading on Monday, according to analysts. The greenback was little changed against a basket of its peers at 93.992, off its one-year high of 94.563 hit last Monday, while the yen remained close to its almost three- year low against the dollar.

U.S. crude was last up 1.28% at $83.33 a barrel, while Brent crude had been last 0.85% higher at 855.58 pbl.

Gold was last up 0.14% at $1,769.60 an ounce after falling 1.5% on Friday due to higher U.S. bond yields and a rise in retail sales in the United States.

Bitcoin was within sight of its all-time high, sitting at $62,000 and not far from April's record of $64,895, having gained last week on hopes that U.S. regulators would allow a futures-based exchange-traded fund.

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