Property sector in China slumps again

Chinese stocks dipped as fresh defaults in the property market led to a declines in broader Asian markets.

By Nadia Elbilassy | @Nadia Elbilassy | 14 May 2024

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  • Agile Group Holdings Ltd's shares dropped by nearly 15% after defaulting on an interest rate payment.

  • The Hang Seng index in Hong Kong remained stagnant due to property stock losses, despite gains in tech giants like Baidu and Alibaba Group.

  • Gold prices edged up in Asian trading, with investors closely monitoring U.S. inflation data for potential impacts on interest rates.

All eyes on China

Despite Beijing's unveiling of plans for a substantial bond issuance, signalling further fiscal stimulus, concerns regarding a broader meltdown in the property market overshadowed market optimism.

Chinese stocks dipped as the property market encountered fresh defaults. Both the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes dipped approximately 0.3%, retracting from their peak levels in 2024. Following a Hong Kong company Agile Group Holdings Ltd whose shares plummeted by nearly 15% following its announcement of defaulting on an interest rate payment on Monday.

The Hang Seng index in Hong Kong remained relatively stagnant due to losses in property stocks, although technology giants such as Baidu and Alibaba Group saw gains ahead of their quarterly earnings releases this week.

Gold prices rocky ahead of CPI

Gold prices inched up slightly during Asian trading on Tuesday, recovering somewhat from significant declines in the previous session. Investors remained focused on upcoming U.S. inflation data to gauge potential impacts on interest rates. Both sets of data PPI today and CPI tomorrow are anticipated to influence expectations regarding U.S. interest rates, particularly after elevated inflation readings in the first quarter.

Spot gold rose by 0.4% to $2,345 per ounce, while gold futures expiring in June also rose by 0.4% to $2,350 per ounce.