China Stocks Edge Up Amid Accelerating Services Activity

China's stock markets saw slight gains on Monday following data showing accelerated growth in the country's services sector for July. In contrast, Hong Kong markets fell alongside global counterparts over U.S. recession fears. China's blue-chip CSI300 index rose, supported by financial and consumer sectors.

China's stock markets showed modest gains on Monday, buoyed by data indicating accelerated growth in the country's services activity for July. The Shanghai Composite index rose by 0.07% to 2,907.33 points by midday. The blue-chip CSI300 index saw a 0.24% increase.

On the flip side, MSCI's Asia ex-Japan stock index fell by 2.83%, and Japan's Nikkei index plummeted by 7.30%. Global investors moved away from risky assets, favoring safer bonds due to dismal U.S. economic data, which raised concerns about the Federal Reserve's ability to soften the economic landing and the potential need for aggressive interest rate cuts to prevent a recession in the world's largest economy.

In China, despite accelerated growth in services activity, the economy grew much slower than expected in Q2, struggling with deflationary pressures and a prolonged property slump. The Caixin/S&P Global services PMI rose to 52.1 in July from 51.2 in June, marking the 19th consecutive month of expansion. However, retail sales in June grew at their slowest pace since early 2023. Chinese H-shares in Hong Kong fell 0.41%, while the Hang Seng Index was down 0.22%.

(With inputs from agencies.)