Economic Unrest Hits China and Hong Kong Stocks Amid Disappointing Indicators

China and Hong Kong stocks experienced a drop as economic indicators failed to provide comfort to investors. Benchmark lending rates remained unchanged, disappointing those looking for fresh stimulus. As lending and sector turnover remained low, downside risks to China's growth are rising, warning experts from Goldman Sachs.

China and Hong Kong stocks experienced a decline on Tuesday as recent economic indicators provided little relief to investors, and the absence of new stimulus policies kept many on the sidelines. China's decision to leave its benchmark lending rates unchanged met market expectations but did little to bolster investor confidence.

Turnover remained low in both A-shares and Hong Kong, with most sectors facing declines. The coal sector dropped 3.6% due to sluggish mid-year earnings and weak demand, while mainland property stocks listed in Hong Kong fell by 2%.

Economists from Goldman Sachs note increasing downside risks to China's growth, emphasizing the critical role of policy interventions. With China's bank lending hitting its lowest in nearly 15 years, the Shanghai Composite index fell by 0.93%, and similar downturns were seen in other major indexes.

(With inputs from agencies.)