Lending markets

Chinese Stocks Fall Ahead of Bank Earnings, Asian Markets Mixed By Investing.com

© Reuters

By Ambar Warrick

Investing.com — Chinese stocks fell on Tuesday ahead of earnings reports from some of the country’s biggest banks, while most other Asian markets were mixed as concerns about a hawkish U.S. Federal Reserve persisted.

China’s top-tier index fell 0.6%, while the index lost a similar amount.

Investors were awaiting earnings reports from Industrial and Commercial Bank of China Ltd (SS:), China Construction Bank Co (SS:) and Bank of China (SS:). Shares of the three were little changed on Tuesday.

Earnings from major banks should provide further clarity on the extent to which China’s economic slowdown has impacted its major banks. COVID-19 shutdowns, a debt crisis in the real estate sector and, more recently, a drought-induced energy shortage have severely hurt Chinese economic activity this year.

This spurred several government stimulus measures, including several interest rate cuts by the People’s Bank of China. But this could end up putting additional pressure on banks’ margins.

The Agricultural Bank of China (OTC:) Ltd (SS:) reported slightly higher profits on Monday, but saw an increase in property-related non-performing loans. Shares of the company – China’s third-largest commercial lender by assets – rose 0.3% on Tuesday.

Broader Asian markets were mixed, following a weak lead from Wall Street. US equities, as losses in tech heavy stocks more than offset a rally in other sectors.

The tech sector is under renewed pressure from rising Treasury yields, after the US Fed adopted a hawkish tone over its plans to raise interest rates this year.

The focus is now on next Friday, which is likely to influence the central bank’s policy tightening plans.

Hong Kong’s heavy tech fell 1.2% and was Asia’s worst performer on Tuesday. Major Alibaba (HK:), Baidu Inc (HK:) and Tencent Holdings Ltd (HK:) lost between 1.2% and 2%. Baidu (NASDAQ:) is also expected to release its results later today.

rose 1%, recovering strongly from Monday’s losses. Data showed the country was stable at 2.6% in July.