(Bloomberg) — Global equities began September on the back foot, after four months of gains, as China’s efforts to support its ailing economy showed no signs of taking hold.
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A gauge of Asian stocks fell, as did a global metric, marking the first day of trading in a typically volatile month for markets. In Hong Kong, the benchmark index declined with shares of New World Development Co. falling as much as 14% after the indebted property developer said it expected to post its first annual loss in two decades.
European index futures slipped, as did their US index counterparts. The dollar was steady, while purchasing managers’ surveys for Taiwan, Thailand and Indonesia all declined, weighing on their currencies. Cash Treasuries were closed for the US Labor Day holiday.
Global funds are positioning for major central banks, including the Federal Reserve, to reduce interest rates in September. At the same time, multiple rounds of stimulus have failed to revive growth in China, where a prolonged property market slump is curbing domestic demand in the world’s second-largest economy.
“I would be more worried about the China side of the equation, to be quite frank,” Carlos Casanova, a senior Asia economist at Union Bancaire Privee told Bloomberg TV. While the fourth quarter is likely to be positive for Chinese risk assets thanks to efforts to shore up domestic demand, “there’s not enough policy space to do big bazooka support measures like in 2009,” he added.
While the Caixin China manufacturing data registered an unexpected increase on Monday, it fell short of reversing sentiment after an official gauge of factory activity contracted for a fourth straight month in August. Latest home sales figures showed a worsening residential slump, after China Vanke Co. underlined the industry’s woes late Friday by reporting a half-year loss for the first time in more than two decades.
“I think there’s a huge problem — by now everybody recognizes that,” Hao Ong, chief economist at Grow Investment Group told Bloomberg’s David Ingles and…
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