Chinese stocks fell on Tuesday even as the country’s Q2 GDP growth slightly beat market expectations, with ongoing property market weakness dampening investor sentiment. In contrast, Hong Kong shares posted modest gains led by tech and AI optimism.
By the midday break:
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China’s CSI300 Index dropped 0.5%
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Shanghai Composite Index fell 0.9%
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Hong Kong’s Hang Seng Index rose 0.2%
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Hang Seng Tech Index gained 0.4%
According to the National Bureau of Statistics, China’s GDP expanded 5.2% year-on-year in the April–June quarter, slightly down from 5.4% in Q1 but beating the 5.1% consensus forecast from a Reuters poll. The data suggested that a US-China trade truce and resilient export growth helped support the world’s second-largest economy.
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However, underlying concerns remain. Investment in real estate declined 11.2% in H1 2025, reflecting a continued downturn in the sector. New home prices in June posted their steepest monthly decline in eight months, underlining weak demand and buyer confidence.
The CSI 300 Real Estate Index slid 2%, while mainland developers listed in Hong Kong lost 1.9%, dragging broader Chinese indices down.
“Despite better-than-expected GDP, the markets are reacting to weak consumption and real estate data,” said Kai Wang, Asia Equity Market Strategist at Morningstar. “Housing prices and sales remain two critical indicators that show no real rebound yet.”
Meanwhile, tech shares saw a boost following Nvidia’s announcement that it would resume shipments of its H20 AI chips to China. This uplifted cloud computing and 5G-related stocks, providing some relief to Hong Kong’s tech-heavy indexes.
Looking ahead, Goldman Sachs analysts believe Chinese policymakers are unlikely to introduce large-scale stimulus measures during the upcoming July Politburo meeting. However, incremental and targeted policy support is expected to cushion the real estate downturn and support employment.
Despite near-term headwinds, investor focus remains on whether policy tweaks, tech optimism, and global trade stability can sustain market sentiment heading into the second half of the year.
