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Stocks in China and Europe fell on Tuesday as a downbeat business survey in China capped a rally fueled by Beijing’s property stimulus.
In Europe, the Stoxx 600 fell 0.5%, its fifth straight session of losses, with France’s Cac 40 down 0.8% and Germany’s Dax down 0.7%.
In China, the benchmark CSI 300 index fell 0.7% and Hong Kong’s Hang Seng lost 2%, erasing most of the gains both had made the day before on news of new government support for the property sector.
Monday’s gains revived concerns about the health of the world’s second-largest economy after private survey data showed activity in the services sector fell in August to the lowest level since Xi Jinping lifted coronavirus controls earlier this year.
The Caixin services PMI hit an eight-month low of 51.8 last month, down from 54.1 in July and below the 53.6 forecast by economists polled by Reuters. The reading was near the neutral 50 mark that separates expectations from contraction.
Shares in embattled Chinese developer Country Garden fell 1%, recouping steeper losses earlier in the day after the company narrowly avoided default by delaying a $2 bond payment during a grace period.
The developer, seen by some investors as a gauge of the health of China’s once-dominant real estate sector, initially failed to make those payments in early August and was granted relief that was due to expire this week. deadline.
The Hang Seng Mainland Property Index fell 3.2% on Tuesday, a day after Beijing vowed to step up support for a property sector that has struggled with weak demand since the country reopened from a three-year strict coronavirus lockdown.
Over the weekend, the government encouraged lenders to lower interest rates on existing mortgages and rolled out policies that would allow buyers in a dozen of China’s largest cities to reduce their down payments.
Some analysts, however, pointed out that while the measures could boost the struggling real estate sector, they are unlikely to boost Chinese consumer confidence.
Duncan Wrigley, chief China economist at Pantheon, said: “A possible reduction in existing mortgage rates should put more money in the hands of relatively wealthy urban households, but they may be worried about the economic outlook. Won’t cost much.” Macroeconomics.
Elsewhere in the region, Japan’s benchmark Topix rose 0.2 percent, while South Korea’s Kospi fell 0.1 percent.
Australia’s S&P/ASX 200 was flat after the Reserve Bank of Australia kept interest rates steady, as expected, but noted that further policy tightening may be needed.
Futures contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq 100 fell 0.2% as U.S. markets prepared to reopen after the holidays.
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