Credit growth also showed some signs of softening, with lending data surprisingly on the downside. M2 money supply came in at 13.5% under the consensus forecast of 14.4% and aggregate financing was also disappointing at 273.1 billion yuan, a fraction of the market expectation of 1.5 trillion yuan.
The headline numbers prompted an initial sell off in the AUD/JPY over concerns that growth momentum could be slowing down. The currency pair, however, did retrace back to its uptrend within the hour.
With investors shrugging off these soft data points, it seems they are optimistic that Chinese policy makers could be providing targeted stimulus measures to support struggling sectors.
On a fundamental basis, Chinese stocks do look relatively cheap compared to its counterparts. The Hang Seng Index is trading at a current P/E of 11, while China H-Shares are at a current P/E of 9.2.
In contrast to the current P/E ratios of S&P 500at 17.6, the ASX at 19.2, and the Nikkei at 20.
The Hang Seng has been testing its 25,000 point resistance level in recent days. This means conservative traders could watch out for the index to retrace back to its next support level at 24,800 for a better entry, or wait for a clear breakthrough above 25,000.