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By Tom Westbrook and Dhara Ranasinghe
SINGAPORE/LONDON (Reuters) - Investors looking for clues about the state of China's economy beyond official data are seeing red warnings flash across a range of informal gauges, prompting many to back out of global assets exposed to the slowdown.
The selling is sucking the wind out of stock markets from London to Bangkok and weighing on China proxies from the Australian dollar to New Zealand dairy prices and shares from luxury goods giant LVMH to miner BHP and casino Las Vegas Sands.
As the post-pandemic period has failed to bring a sustained recovery in consumer spending, or to thaw the near-frozen property market, most analysts now figure the world's second-largest economy is going to miss its 5% growth target this year.
Beneath the headlines, investors are even gloomier with higher-frequency and more arcane data from a shrinking current account surplus to ballooning deposits and soft surveys pointing to a deep-seated confidence problem.
"It's pretty weak," said Sat Duhra, a portfolio manager at Janus Henderson who devises a macro score for countries by tracking seven factors including PMI surveys, real exchange rates, current accounts, growth estimates and liquidity.
"PMIs have been weak, GDP is being revised downward. It's a tricky situation," he said. "And I don't see any point, at this point, in taking a bullish view on China when all of these things are going on."
His fund invests in China, but away from economically sensitive sectors such as banks, property or industrials.
Beyond China, which is the largest trading partner of most of its neighbours and other big economies, souring demand is beginning to take a toll.
New Zealand's Fonterra, the world's biggest dairy exporter, has cut its farm gate milk price forecast twice in a month citing "reduced demand from key importing regions." It previously noted that the largest slowdown was in China.
Last week BHP Group posted its weakest annual profit in three years and manganese-focused spinoff South32 said profit fell by nearly two thirds. New Zealand's a2 Milk Co warned of weak growth in China's infant formula market.
Shares of BHP, S32 and a2 fell.
Seema Shah, chief global strategist at Principal Global Investors in London, sees the slowdown biting in Europe, where investors tend to connect the fortunes of German manufacturers with the those of their Chinese customers.
"We have become a bit more gloomy on Europe," she said, noting China also poses a risk to U.S. equities.