Chinese data points to 'broad economic slowdown' in August

(Sharecast News) - A trio of leading economic indicators from China came in below estimates on Monday, raising speculation that Beijing may step in to inject more stimulus to shore up growth. According to the National Bureau of Statistics of China, the annual rate of industrial production growth unexpectedly slowed to 5.2% in August, down from 5.7% in July and missing the 5.8% consensus forecast.

This was the slowest year-on-year growth in 12 months, with slowdowns seen in manufacturing and energy utilities production.

Meanwhile, Chinese retail sales totalled CNY3,967bn in August, rising 3.4% over last year - the weakest growth in nine months. This was the third straight slowdown, easing from 3.7% in July, missing the 3.8% pencilled in by economists.

In other news, fixed asset investment over the year to August was up just 0.5% over last year, down from 1.6% over the year to July and much lower than the 1.4% growth expected by analysts.

The miss was a result of a sharp fall in property activity, with real estate investment sinking 12.9%. Excluding this, year-to-date fixed asset investment would have risen 4.2%.

Kathleen Brooks, research director at XTB, said the data reflected signs of a "broad economic slowdown" in China.

"This data is unlikely to deter another leg higher for stocks, since it could spur the Chinese government on to add more stimulus to prop up the economy, which is risk positive," Brooks said.