China’s Q2 2024 GDP did not meet the expectations shared by the government and this, together with the increasingly probable election of Trump in the United States, seems to worry global stock markets
As the Chinese economy faces a variety of internal and external challenges, stock markets remain highly dependent on various global political developments. In particular, the possible re-election of Trump represents an increasingly significant risk factor, which could influence negatively the Chinese stock market. So what makes sense to expect from Chinese stock indices? A look at the Hang Seng.
China Economy: Should You Be Worried?
China’s economy showed signs of stagnation in the second quarter of 2024, with Gross Domestic Product (GDP) growth of 4.7% compared to the previous year, lower than market expectations which they stood at 5.1%. This decline follows a more promising first quarter, which saw growth of 5.3%. The deceleration is attributable to several factors, including a prolonged slowdown in the real estate sector and job insecurity which have weighed on domestic demand.
Although in May, the Chinese government introduced a series of policies to stimulate the real estate sector and strengthen the economy, according to many analysts, it is still early to assess the impact of these measures. Having said that, today’s data is not so promising and the economic situation is still undermined by the fragility of external demand, which remains uncertain due to geopolitical tensions and fluctuations in global trade.
Will Trump take down the Chinese stock market?
Surprisingly, what worries the markets most is not only China’s economic performance but also the growing probability of Donald Trump’s re-election to the US presidential elections. After a failed assassination attempt, voter support for Trump has increased significantly, raising concerns about how his possible victory could affect the Chinese stock market and the global economy.
Trump, along with his new vice presidential candidate, JD Vance are known for their policies regarding China and emerging markets. During his previous term, Trump imposed a series of punitive tariffs on Chinese products, kicking off a trade war that had significant repercussions on both economies. A re-election could lead to an escalation of trade tensions, with new tariffs and restrictions further hurting China’s exports and its overall economy.
Hang Seng: how is the index moving on the stock market?
From a technical perspective, Hong Kong’s Hang Seng Index reflects economic and political uncertainties. After reaching a yearly high in January, the index has been trending lower, with a series of lower lows and higher highs indicating continued selling pressure. The price of the index recently fell below its 50-day moving average due to a series of rather pronounced red candles, precisely expressing the concerns emerging in the market at the moment.
- Hang Seng, 1D
- Source: Baha.com
Original article published on Money.it Italy 2024-07-18 18:32:00. Original title: Azioni Cina, attenzione. È in arrivo un nuovo crollo
