China and Hong Kong Stocks Dip Amid Economic Concerns

China and Hong Kong stocks fell on Tuesday due to lackluster economic indicators and absence of fresh stimulus measures. Benchmark lending rates remained unchanged, while coal stocks saw significant declines. Bank lending in China plummeted to its lowest in nearly 15 years, raising concerns about economic growth.

China and Hong Kong stocks dipped on Tuesday, offering little respite for investors already uneasy about recent economic indicators and the lack of new stimulus policies.

China's decision to leave benchmark lending rates unchanged at a monthly fixing met market expectations but highlighted the challenges lenders face with shrinking interest margins, following last month's key interest rate cuts. Coal stocks led the declines, reflecting disappointment over sluggish mid-year earnings and waning demand.

Goldman Sachs economists warned of rising downside risks to China's growth, emphasizing that restrictive fiscal policy could exacerbate negative economic forces, further slowing growth. Last week's data showed a sharper-than-expected drop in bank lending, hitting its lowest level in almost 15 years.

The Shanghai Composite index fell by 0.1% to 2,865.18 points, while the blue-chip CSI300 index dropped 0.7%. Other sector-specific indices also saw declines: the real estate index dipped 1.5%, and the healthcare sub-index dropped 1.2%. In Hong Kong, Chinese H-shares fell 0.5%, contributing to a 0.4% decline in the Hang Seng Index to 17,506.34. The smaller Shenzhen index was down 1.3%, while Shanghai's tech-focused STAR50 index dropped nearly 1%. In contrast, MSCI's Asia ex-Japan stock index gained 0.23%, and Japan's Nikkei rose 1.80%. The yuan weakened slightly, quoted at 7.146 per U.S. dollar.

(With inputs from agencies.)