Baqar HussainAsian equity markets were mixed on Monday, with data from the world’s second largest economy in focus. But volumes in the region were light with Hong Kong, Taiwan and South Korea shut for the Mid-Autumn Festival.
Chinese industrial profits declined 8.8 percent on year in August, worse than July’s 2.9 percent fall, the National Statistics Bureau announced at the market open. For the first eight months of the year, profits slid an annual 1.9 percent.
Attention now falls on China’s official September purchasing manufacturing managers’ index (PMI) and the final Caixin/Markit PMI, both due on Thursday. The data will be closely watched after Caixin’s preliminary reading for September touched a six-and-a-half-year low of 47, well below the key 50-level. Meanwhile, the U.S. nonfarm payrolls report for September is expected on Friday.
Investors also continued to react to comments by Federal Reserve Chair Janet Yellen last week. In a speech after the U.S. market close on Thursday, Yellen said she personally anticipated an interest rate hike this year.
“Comments by Yellen and other U.S. Fed members as well as China’s dismal data continue to define the broad picture of the financial market, which presents significant challenges to Asian policymakers….While the regional trade recession has hurt export-intensive economies, countries with big domestic markets [like India] should still have some room for interest rate easing,” ANZ economists said in a morning note.
A mixed handover from Wall Street also dampened sentiment in Asia. The Nasdaq Composite closed down 1 percent on Friday, pressured by decline of nearly 5 percent in the iShares Nasdaq Biotechnology ETF (IBB). Meanwhile, the S&P 500 ended flat and the Dow Jones Industrial Average closed up 100 points.
China’s benchmark Shanghai Composite index hit its lowest level in nearly two weeks, extending losses after closing down nearly 2 percent on Friday.
Banks were among the biggest losers, with ICBC, Bank of China and Bank of Communications down by more than 1 percent each.
Asian equity markets were mixed on Monday, with data from the world’s second largest economy in focus. But volumes in the region were light with Hong Kong, Taiwan and South Korea shut for the Mid-Autumn Festival.
Chinese industrial profits declined 8.8 percent on year in August, worse than July’s 2.9 percent fall, the National Statistics Bureau announced at the market open. For the first eight months of the year, profits slid an annual 1.9 percent.
Attention now falls on China’s official September purchasing manufacturing managers’ index (PMI) and the final Caixin/Markit PMI, both due on Thursday. The data will be closely watched after Caixin’s preliminary reading for September touched a six-and-a-half-year low of 47, well below the key 50-level. Meanwhile, the U.S. nonfarm payrolls report for September is expected on Friday.
Investors also continued to react to comments by Federal Reserve Chair Janet Yellen last week. In a speech after the U.S. market close on Thursday, Yellen said she personally anticipated an interest rate hike this year.
“Comments by Yellen and other U.S. Fed members as well as China’s dismal data continue to define the broad picture of the financial market, which presents significant challenges to Asian policymakers….While the regional trade recession has hurt export-intensive economies, countries with big domestic markets [like India] should still have some room for interest rate easing,” ANZ economists said in a morning note.
A mixed handover from Wall Street also dampened sentiment in Asia. The Nasdaq Composite closed down 1 percent on Friday, pressured by decline of nearly 5 percent in the iShares Nasdaq Biotechnology ETF (IBB). Meanwhile, the S&P 500 ended flat and the Dow Jones Industrial Average closed up 100 points.
Shanghai down 0.2%
China’s benchmark Shanghai Composite index hit its lowest level in nearly two weeks, extending losses after closing down nearly 2 percent on Friday.
Banks were among the biggest losers, with ICBC, Bank of China andBank of Communications down by more than 1 percent each.
Nikkei slips 1%
Japanese shares fell as much as 1.5 percent, losing ground after a near 2 percent rally on Friday.
Exporter shares were weighed down by a slightly stronger currency; the yen was 0.2 percent higher at around 120.2 per dollar. Sony andFanuc led losses by 3 percent while Honda lost 2 percent.
Suzuki Motor erased early gains to drop 1.8 percent after it announced plans on Saturday to sell its 1.5 percent stake in Volkswagen to Porsche. No price tag was revealed but Suzuki says it will post a $304 million special profit from the proceeds.
ASX up 1.2%
A rally in the banking sector underpinned gains in Australia’s benchmark S&P ASX 200.
Australia New Zealand Banking and Commonwealth Bank of Australiajumped 2 percent each while National Australia Bank and Westpac both climbed more than 1 percent.
M2 surged 14 percent following news before the start of trade that the telecommunications firms will merge with rival Vocus to create a A$3 billion company. Shares of the latter tumbled 6 percent however.
Emerging markets lower
Indonesia’s Jakarta Composite lost nearly 2 percent to hit a one-month low. Meanwhile, Malaysia’s FTSE Bursa Malaysia KLCI and Thai shares lost 1 percent each.
Syed Zaki Hussain
