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Asian Markets Are Mixed, China Fell Due to Regulatory Concerns

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Jul. 17 2017, Updated 10:11 a.m. ET

Asian markets

After gaining for four consecutive trading weeks, China’s Shanghai Composite Index opened this week with a weaker sentiment.

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China

Despite the release of China’s upbeat economic data, the Shanghai Composite fell on Monday amid concerns about tougher regulations. According to data released by the National Bureau of Statistics of China, China’s GDP in the second quarter remained unchanged at 6.9% growth YoY (year-over-year)—better than the market’s expectation of 6.8%. China’s industrial production recorded growth of 7.6% YoY in June—better than May’s growth and the market’s expected growth of 6.5%.

President Xi Jinping’s comments during the conference on regulations triggered concerns in the market. President Xi Jinping called for the central bank to strengthen regulations to defend China’s economy against financial risks. In addition to concerns about firm regulations, the approval of new initial public offerings also weighed on the market.

On July 17, the Shanghai Composite Index fell 1.4% and ended the day at 3,176.46. The SPDR S&P China ETF (GXC) rose 1.5% to $94.28 on July 14.

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Hong Kong

Hong Kong’s Hang Seng Index gained for five consecutive trading days and closed last week at the highest levels in two years. The Hang Seng Index opened higher this week amid improved sentiment on Wall Street and China’s positive economic data. China’ strong GDP data increased hopes of higher money inflows into Hong Kong and pushed the market higher. The Hang Seng Index rose 0.31% and closed the day at 26,470.58. The iShares MSCI Hong Kong ETF (EWH) rose 0.38% to $23.88 on July 14.

Japan

Last week, Japan’s Nikkei Index broke the two-week losing streak amid improved market sentiment. Japan’s markets are closed on Monday due to Ocean Day. The market is looking forward to Japan’s trade balance, exports, and imports data this week.

In the next part, we’ll discuss how European markets performed in the morning session on July 17.

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