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China GDP & Retail Sales Growth In The First Quarter Of 2023 Smash Expectations
Brendan Ahern
Apr 18, 2023,10:00am EDT
Key News
Asian equities were mostly lower overnight except for Japan, despite an overwhelmingly positive economic release coming out of China.China logged better-than-expected GDP growth in the first quarter of 2023 and retail sales were also unexpectedly strong. Some analysts are calling the release an indication of a continuous, rather than a sporadic, recovery. One broker used the word “revenge spending” to describe what is going on. Meanwhile, industrial production was lower than expected, likely due to slowing global demand as a potential recession looms in the US and Europe.
Though not in the headline release, online retail sales of goods grew at an even faster pace of 10.9% year-over-year (YoY) in March and over 12% if you include online services, too. Investors may be looking for the recovery to continue through mid-year to fully re-enter E-Commerce names, which may have accounted for the surprising weakness of E-Commerce names overnight.
Investors’ reaction to the positive release was relatively muted overall as Mainland China markets were mixed and Hong Kong markets were lower overnight. This may have been due, in part, to significant share sales to private investors by a handful of Hong Kong names overnight.
Mainland media reported that regulators may reduce the Ant Group’s fine from $1 billion to around $700 million and limit the stated charge to operating a financial company without a license.
The Hang Seng and Hang Seng Tech indexes fell -0.63% and -1.21%, respectively, on volume that decreased -20% from yesterday. The top-performing sectors overnight were materials, health care, and financials. Meanwhile, consumer discretionary, technology, and utilities were among the worst. Mainland investors bought a net $288 million worth of Hong Kong stocks overnight via Southbound Stock Connect.
Shanghai, Shenzhen, and the STAR Board diverged to close +0.23%, -0.12%, and -0.90%, respectively, on volume that decreased -5% from yesterday. The top-performing sectors overnight were financials, communication services, and consumer staples. Meanwhile, health care, real estate, and utilities were among the worst. Foreign investors bought a net $288 million worth of Mainland stocks overnight via Northbound Stock Connect.
China GDP & Retail Sales Smash Expectations
Asian equities were mostly lower overnight except for Japan, despite an overwhelmingly positive economic release coming out of China.
www.forbes.com
