China's Growth Disappointment Is Moving Stocks Monday: Tencent, PDD Holdings And Luxury Goods

China’s recent release of mixed economic data is weighing on U.S.-listed Chinese equities and sectors strongly linked to Chinese growth on Monday.

China’s economy grew 6.3% YoY in Q2 2023, missing the market’s projected 7.3% rise. This marks a jump from Q1’s 4.5% increase.

June 2023 saw industrial production up 4.4% YoY, exceeding the estimated 2.7% boost. Conversely, retail sales grew only 3.1% YoY, its weakest performance since last December, falling short of the 3.2% forecast.

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Market Reactions: Chinese ADRs, Commodities, Luxury Stocks In Focus

Commodities and Asian equities were the first assets affected by the data, followed by European luxury stocks and, then, U.S.-listed Chinese stocks.

Copper, a commodity that is extremely susceptible to the country’s growth momentum, fell 2.2% on the day, its worst session since May 10. Gold and silver, two precious metals, fell 0.1% and 0.5%, respectively, following a robust week of gains.

Tencent Music Entertainment Group TME was the weakest link among Chinese ADRs, falling 5%. PDD Holdings PDD followed with a 3% decline, according to Benzinga Pro data. However, Alibaba Group Holding Ltd. BABA and JD.com, Inc. JD managed to limit their losses, with 1.6% and 0.8% declines, respectively.

In the European luxury sector, companies including Hermès International Société HESAY, and LVMH Moet Hennessy LVMHF experienced significant downward pressures, with declines exceeding 3%. The Swiss Compagnie Financière Richemont SA CFRUY, announced lower-than-expected organic revenue growth in the first quarter, contributing to the stock’s 9% drop.

In the materials and mining sector, Vale S.A. VALE, Rio Tinto Plc RIO, Southern Copper Corp. SCCO, and Freeport-McMoran Inc. FCX all suffered 2% to 2.7% drops.

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