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Asia stocks drop following weak China data

China data

The Shanghai Composite Index declined 0.5%, Hang Seng lost 0.7%, Kospi dipped 0.8% while S&P/ASX 200 shed 1%

Stock markets in Asia dropped Tuesday on worries over turmoil in Afghanistan and unease about China’s economic outlook following weak activity in July.

Investors now eye a speech by U.S. Federal Reserve chairman Jerome Powell for an update on the health of the world’s biggest economy. Traders also look ahead to U.S. sales and factory data.

The Shanghai Composite Index declined 0.5% while the Nikkei 225 in Tokyo advanced 0.1%. The Hang Seng in Hong Kong lost 0.7%.

The tech index in Hong Kong, where several of China’s biggest internet giants are listed, shed 1.74%.

The Kospi in Seoul dipped 0.8% while Sydney’s S&P/ASX 200 shed 1%. Benchmark indexes in Singapore and Taiwan retreated.

Traders got some positive sentiment from Wall Street but also were paying close attention to the situation in Afghanistan, said Anderson Alves of ActivTrades in a report.

Markets also were digesting news that Chinese factory output, consumer spending and investment in July were lower than expected. The government cited flooding in central China and controls on travel and business to fight outbreaks of Delta variant of the coronavirus as reasons for the disappointing data.

That led to a drop in oil prices Monday as traders adjusted forecasts of Chinese demand.

Beijing’s policy of pursuing zero virus cases points towards the risk of aggressive measures that may continue to put a cap on growth, said Yeap Jun Rong of IG in a report.

On Wall Street, the S&P 500 advanced 0.3% to 4,479.71. The Dow Jones Industrial Average (DJIA) gained 0.3% to 35,625.40. The Nasdaq dropped 29.14 points to 14,793.76.

In energy markets, benchmark U.S. crude advanced 10 cents to $67.36. Brent crude added 16 cents to $69.62.

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