Asia report: Markets rise as China manufacturing data disappoints
Stock markets in Asia were in the green across the board on Monday, as investors digested some disappointing manufacturing data out of China.
In Japan, the Nikkei 225 was up 1.82% at 27,781.02, as the yen strengthened 0.15% against the dollar to last trade at JPY 109.56.
Fashion firm Fast Retailing was down 0.18%, while among the benchmark’s other major components, automation specialist Fanuc rose 2.93% and technology conglomerate SoftBank Group added 1.83%.
The broader Topix index was 2.05% firmer by the end of trading in Tokyo, settling at 1,940.05.
On the mainland, the Shanghai Composite was ahead 1.97% at 3,464.29, and the smaller, technology-heavy Shenzhen Composite advanced 2.15% to 2,436.92.
Manufacturing data poured out of China on Monday, with the unofficial Caixin/Markit manufacturing purchasing manufacturers’ index (PMI) coming in at 50.3 for July.
That was well below the 51.1 expected by analysts polled by Reuters, and was a drop from the 51.3 reading in June.
It also came after the weekend release of Beijing’s official manufacturing PMI, which primarily focuses on larger manufacturers, with the reading for July being 50.4, falling from 50.9 in the prior month.
Both readings were still above the 50-point mark that separates expansion from contraction over the previous month, however.
“The reports are at odds over the direction for producer price index (PPI) rises,” said Pantheon Macroeconomics chief Asia economist Freya Beamish.
“The official report suggests that input and producer prices rose at a faster pace again in July, as we suspected, with the full whack of commodity price increase not yet reflected in the PPI.”
That, Beamish said, implied a pick-up in PPI inflation to above 9%, from 8.8% in June.
“The Caixin report, however, showed a softening of price rises, with panellists reporting that previous rises had dampened demand.
“Looking further ahead, however, the official stock of finished goods index points to a cap on inflationary pressure on goods prices.”
South Korea’s Kospi was 0.65% firmer at 3,223.04, while the Hang Seng Index in Hong Kong was up 1.06% to 26,235.80.
Chinese electric car manufacturer Xpeng leapt 10.66% in the special administrative region, after it reported a record high number of vehicles delivered for July.
Anglo-Asian bank HSBC, meanwhile, was ahead 0.93% in Hong Kong, after it beat expectations for first-half earnings and announced a dividend.
The blue-chip technology stocks were on the front foot in Seoul, with Samsung Electronics up 1.02% and SK Hynix ahead 3.11%.
Oil prices were lower at the end of the Asian day, with Brent crude last down 1.34% at $74.40 per barrel, and West Texas Intermediate off 1.5% at $72.84.
In Australia, the S&P/ASX 200 jumped 1.34% to 7,491.40, as pay-later lending firm Afterpay rocketed 18.77% on the Sydney bourse.
That came after US fintech giant Square announced that it had agreed to buy Afterpay in an all-share deal worth $29bn.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.86% higher at 12,702.97, led higher by local cargo giant Mainfreight, which jumped 3.5% after a target price uplift at Jarden.
The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.21% at AUD 1.3586, and the Kiwi advancing 0.15% to NZD 1.4318.