China A-Share ETF Drops in New York on Economic Data After Rally

  • China's GDP posts weakest quarterly expansion since 2009
  • JD.com rises after China's retail sales beat estimates

The largest U.S. exchange-traded fund tracking A shares fell, retreating from a two-month high, as investors weighed data showing the weakest expansion in China’s economy since 2009 during the third quarter.

The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF declined 1.7 percent to $35.59 at the close in New York. Traders added $70 million to the fund in the five days through Oct. 16, the biggest inflow in six weeks, according to data compiled by Bloomberg. The Shanghai Composite Index slid earlier on Monday from an eight-week high.

China’s gross domestic product rose 6.9 percent in the third quarter, the National Bureau of Statistics said Monday. While the expansion rate was better than economists’ forecasts of 6.8 percent, it was still below government’s target of 7 percent for this year. Industrial output missed the estimate for a 6 percent increase, while fixed-asset investment in the first nine months rose less than a median projection of a 10.8 percent gain. The ETF has rallied with mainland stocks in the past month on speculation that policy makers will accelerate reforms of state-owned companies and introduce more measures to boost growth.

Mixed Data

“The data was mixed, so it isn’t giving a strong signal that we’re seeing a big pick up in the economy,” Michael Wang, a strategist at hedge fund Amiya Capital in London, said by e-mail. “There is still some downside concern about the next year’s growth.”

A Bloomberg gauge of the most-traded Chinese stocks in the U.S. added 0.3 percent to 111.6, the highest in two months. Kandi Technologies Group Inc., a Chinese electric vehicle maker, surged 19 percent to $9.23, the most since July 2014 and the best performance on the index. The country’s electric car sales exceeded 30,000 units in September, Sina.com reported on Monday, citing data from China Association of Automobile Manufacturers. Alibaba Group Holding Ltd. added 0.9 percent to $72.65, the highest in a month, while rival JD.com Inc. rose 0.7 percent to $27.09.

“Consumer spending in China is not as bad as investors earlier thought,” Henry Guo, an analyst at Summit Research Partners in New York, said by phone. “Online retailers such as JD.com or Alibaba haven’t really felt the pain of the slowing economic growth yet.”

China’s sales increased 10.9 percent last month, exceeding the 10.8 percent gain forecast, the government data showed on Monday.

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