US Stocks Rebound, Asia Buffeted By Weak China Data, Macau Crackdown

Global stocks were mixed Wednesday, with Wall Street rebounding after several lackluster sessions and Asia lower following weak Chinese economic data and news of a casino crackdown in Macau.

Major US indices spent part of the day in the red, but hit their stride in the afternoon hours.

"The market got a bit oversold in the near term," said Tom Cahill of Ventura Wealth Management, who pointed to underlying confidence in an economic rebound despite the ongoing wave of Covid-19 infections that have weighed on sentiment.

Cahill said he was encouraged to see gains by companies like metals producer Freeport McMoran and General Motors, viewing their increases as "a vote of confidence in the global economy."

Stocks have been in retreat much of September as analysts weigh the ongoing risk of Covid-19 and a likely tightening of Federal Reserve monetary policy as soon as this fall.

But the broad-based S&P 500 led the major US indices, climbing 0.9 percent.

The positive US session came on the heels of losses in Europe and Asia.

Growth in Chinese retail sales sank in August to a 12-month low, as parts of the country were hit by lockdowns and other containment measures to fight the worst Covid outbreak since its initial spread in 2020.

The data comes after a string of figures indicating China's economic recovery seen last year and at the start of 2021 was petering out.

China's services sector contracted in August for the first time since the start of the pandemic while factory activity expanded only marginally amid a new domestic coronavirus flare up.

The tepid growth figures are "largely due to the Delta variant wave and unprecedented tightening measures on the property sector," said Ting Lu at investment bank Nomura.

"We reckon that China's zero-Covid strategy could be increasingly costly for the Chinese economy."

Hong Kong had an especially ugly day, falling 1.8 percent after Macau unveiled plans for a crackdown on the gambling industry and announced a 45-day public consultation that included a proposal for direct supervision over casinos.

Hong Kong-listed operators Sands China and Wynn Macau both plunged around 30 percent; SJM Holdings and MGM China lost 25 percent while Melco and Galaxy Entertainment both shed around 20 percent.

Europe's main markets also fell, with London hit by data showing UK annual inflation spiked to a nine-year peak of 3.2 percent in August.

Oil prices, meanwhile, rallied after a US crude inventory report that showed a fall in stockpiles in the wake of tropical storms that have shuttered output in the Gulf of Mexico.