(Bloomberg) — Stocks in Asia declined after another round of weak data fueled concerns about recovery in China. The prospect of continued monetary tightening by the Federal Reserve also weighed on sentiment.
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Shares in mainland China were the worst performers in the region as investors parsed data that showed growth for the second quarter missed estimates. Gross domestic product expanded 6.3% in the second quarter from a year prior, weaker than the median forecast of 7.1% from economists surveyed by Bloomberg.
The onshore and offshore yuan weakened. The People’s Bank of China earlier extended support for the currency, but kept its medium-term lending facility unchanged Monday despite mounting market calls for more stimulus.
“Evidence of a broad slowdown in the Chinese economy” caused the yuan to fall, according to Fiona Lim, senior FX strategist at Malayan Banking Bhd in Singapore. She said there may be some consolidation in the currency, given the more benign environment with Treasuries and the greenback.
Shares fell in South Korea and were steady in Australia. Japanese markets are shut for a holiday while morning trading in Hong Kong is canceled due to a storm.
Contracts for the S&P 500 and Nasdaq 100 were lower in Asia. The rally in US stocks hit a wall Friday after a report showed consumer sentiment climbed to an almost two-year high, reinforcing the view that the Federal still has a long way to go to bring inflation down.
The dollar was little changed Monday after a gauge of greenback strength snapped a five-day losing streak Friday. The currency’s weekly slide has the index back near levels last seen in April 2022 as some strategists and investors suggest its long bull run is over.
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The yen edged higher after Bank of Japan Governor Kazuo Ueda said uncertainty remains high over the US and global economies. He also said there wasn’t much change in Japan’s bond-market functionality from the previous monetary policy meeting in June.
Yields on Australia’s policy-sensitive three-year notes steadied while those on…
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