[HONG KONG] China's stocks fell, dragging the benchmark index from an eight-week high, after the release of data showing the weakest quarterly expansion since 2009.
The Shanghai Composite Index slid one per cent to 3,356.70 at 2.14 pm, erasing an advance of as much as 1 per cent. Technology and telecom companies, the best performers over the past week, led declines. Seven stocks dropped for every two that gained in Shanghai.
The benchmark measure surged 6.5 per cent last week for the steepest weekly gain in four months as traders speculated the government will accelerate reforms of state-owned companies and loosen monetary policy to bolster the economy. China's gross domestic product rose 6.9 per cent in the three months through September, the National Bureau of Statistics said Monday, beating economists' estimates for 6.8 per cent. Still, that was less than the government's target of 7 per cent for this year. Industrial output in September rose 5.7 per cent, trailing estimates.
"It may well be profit taking," said Bernard Aw, a strategist at IG Asia Pte in Singapore. "In addition, the Shanghai Composite is approaching a key level at 3,500. Investors may not have the conviction to push past this level unless we see a significant impulse such as stronger fiscal or monetary stimulus." Stimulus Speculation The Chinese stock market's recent rebound continued to lure back investors, with Friday's turnover jumping to the highest level since Sept 2 and margin debt capping the longest stretch of gains in two months. Trading volumes in Shanghai soared 47 per cent above the 30-day average for this time of day.
Hong Kong's Hang Seng China Enterprises Index slipped 0.3 per cent, while the Hang Seng Index lost 0.6 per cent. The CSI 300 Index decreased 0.7 per cent.
The Shanghai Composite has rebounded 16 per cent from an August low amid speculation that policy makers will introduce more measures to boost growth after a rout in equities that erased almost US$5 trillion of market value. The government has cut interest rates five times since November and boosted infrastructure spending in recent months.
China's services sector propped up the economy, suggesting monetary and fiscal stimulus is keeping Premier Li Keqiang's 2015 expansion target within reach. Retail sales increased 10.9 per cent last month, exceeding the 10.8 per cent gain forecast. Industrial output missed the estimate of 6 per cent growth. Fixed-asset investment climbed 10.3 per cent in the first nine months from the same period last year, compared to a median projection of a 10.8 percent increase.
"The growth number beats the estimate, but it's still less than the government target," said Yen Chiu, a Hong Kong-based trader at Shenwan Hongyuan Group Co.
A "sluggish" world economy is weighing on growth, President Xi Jinping said in an interview with Reuters over the weekend. China isn't immune to the lackluster performance of the global economy, Mr Xi said.
Margin traders increased holdings of shares purchased with borrowed money on Friday, with the outstanding balance of margin debt on the Shanghai Stock Exchange rising 0.3 per cent to 602.5 billion yuan (S$130.9 billion).
Gauges of telecom and technology companies in the CSI 300 slid at least 1.8 per cent for the worst performance among 10 industry groups. China United Network Communications Ltd and Shanghai Wangsu Science & Technology Co. both dropped 3.1 per cent.
China National Nuclear Power Co. increased 2.9 per cent in Shanghai. The UK and China are set to announce a deal that will give the Asian nation a stake in Electricite de France SA's Hinkley Point project, Britain's first nuclear plant in three decades.