Sydney - China's weaker growth trajectory and lockdown pulled Asian share markets on Monday and oil prices slid after shockingly weak data from the world's second-largest economy.

China's April retail sales plunged 11.1% on the year, almost twice the fall forecast, while industrial output dropped 2.9% when analysts had looked for a slight increase.

"The data paint a picture of a stalling economy and one in need of more aggressive stimulus and a rapid easing of COVID restrictions, neither of which are likely to be forthcoming anytime soon," said Mitul Kotecha, head of emerging markets strategy at TD Securities.

"China's weaker growth trajectory will add to pressure on its markets and fuel a further worsening in global economic prospects, weighing on risk assets. We expect further CNY depreciation."

In Europe, EUROSTOXX 50 and FTSE futures both eased 0.3%. S&P 500 stock futures lost early gains to drop 0.6%, while Nasdaq futures fell 0.5%. Both are far from last year's highs, with the S&P having fallen for six straight weeks.

Sky-high inflation and rising interest rates drove U.S. consumer confidence sink to an 11-year low in early May and raised the stakes for April retail sales due on Tuesday.

Fears that the tightening will lead to recession spurred a rally in bonds last week, with the dollar coming off a two-decade top, though not by much.

Many economists have downgraded their China gross domestic product (GDP) growth targets for this year, citing risks from the zero-COVID policy. Most notably, the International Monetary Fund recently lowered its China GDP growth forecast for 2022 to 4.4%, well below the government's target of about 5.5%.

Any extended disruption to consumer spending and business output over the long term is a risk to China-exposed companies. Apple has warned of an earnings hit of up to $8 billion from COVID-related supply disruptions; General Electric reports that lockdowns are suppressing demand as well as causing supply-chain problems. Beyond a raised risk for a short-term earnings miss, there may be a risk that global businesses slow or stop investing in China over the longer-term.

Monday's data overshadowed news that Shanghai aimed to reopen broadly and allow normal life to resume from June 1.
-Reuters/Schwab