Hong Kong, China Stocks Finish Lower

Shares in mainland China plunged on Thursday, extending a recent sell-off after a surge this month that had seen the Shanghai markets pile on more than 15 percent, while Hong Kong was hit by concerns about a spike in virus infections at home and around the world.

New data showing China's economy expanded more than expected in the second quarter was unable to offset the glum mood.

The benchmark Shanghai Composite Index sank 4.5 percent, or 151 points, to 3,210 while the Shenzhen Composite Index on China's second exchange tumbled 5.2 percent, or 117 points, to 2,144.

The Hang Seng Index in Hong Kong shed 2 percent, or 510 points, to 24,970.

Other Asian markets also fell as investors fretted over fresh rises virus infections around the world and the reimposition of lockdowns.

Sydney and Singapore fell 0.7 percent with Seoul 0.8 percent lower. Taipei, Bangkok and Wellington also fell, although Mumbai, Manila and Jakarta rose.

Geopolitical tensions, particularly between China and the United States, were also fanning uncertainty.

Beijing said the world's second biggest economy expanded 3.2 percent in the second quarter, significantly better than expected, indicating China is well on the road to recovery after months of lockdowns that caused a first-quarter contraction.

However, while the reading was welcomed, analysts said investors had largely priced-in a recovery and pointed to a worse-than-expected drop in retail sales in June – a small rise had been forecast – suggesting consumers are still reluctant to spend.

The retail sector has taken on an increasingly significant role in China's economy as leaders look for consumers, rather than trade and investment, to drive growth.

"No matter how much stimulus and fiscal sugar you try to entice consumers with, they will not leave their apartment and go on a spending spree until they feel confident the landscape is virus-free," said AxiCorp's Stephen Innes. (AFP)