China’s factory output and retail sales growth slowed sharply last month
Asian stocks were mostly lower on Monday amid a combination of worries about the impact of the Afghan government’s collapse, weak Chinese economic data, and surging coronavirus infections in the region. According to fresh data, China’s factory output and retail sales growth slowed sharply and missed expectations in July. Still, the Shanghai Composite erased early losses to finish 0.03% higher.
Meanwhile, the Japanese economy expanded 0.3% in the second quarter, compared with a 0.9% contraction in the previous quarter and consensus forecasts for 0.2% growth. Japan’s benchmark Nikkei 225 shed 1.62% during the session despite better-than-expected data. Australia’s S&P/ASX 200 slipped 0.61 while Hong Kong’s Hang Seng dipped 0.8%.
In Europe, equities slipped at the open as investors digested disappointing data out of China, with the pan-European Stoxx 600 down around 0.3% during morning deals. Investors are also closely monitoring the potential geopolitical implications of a collapse of the Afghanistan government. In individual stocks, German carrier Lufthansa slipped over 4% in a knee-jerk reaction to the news that Germany’s finance agency plans to sell up to a quarter of its 20% stake in the coming weeks, citing positive developments at the company.
Meanwhile, the dollar has steadied following a sell-off witnessed on Friday when the disappointing consumer sentiment report sent the greenback lower across the board. EURUSD bounced to the 1.1800 area but remains capped by this level where the 20-DMA lies. Growth fears boost the safe-haven dollar at the beginning of the week, keeping the common currency under some downside pressure.
In other markets, gold prices climbed to fresh local highs in the $1,782 area earlier in the day before retreating in recent trading. The bullion turned marginally lower on the day as the safe-haven dollar demand has picked up somehow. The $1,800 figure remains the key bullish target for the yellow metal while on the downside, the $1,750 region represents the immediate support.