Asia Pacific superstores traded mixed Thursday morning as a private survey showed Chinese factory activity contracted in July.
Mainland Chinese domestics slipped: The Shanghai composite fell 0.31% and the Shenzhen component declined 0.15%. The Shenzhen composite shed 0.167%.
Hong Kong’s Be consistent Seng index declined 0.42% as shares of HSBC dropped 0.39%.
The benchmark Kospi in South Korea recovered from an earlier come out with to rise 0.31%. Shares of major chipmaker SK Hynix retraced losses to gain 1.3% while Samsung declined 0.44%.
Commerce data for July showed South Korean exports fell 11% on-year, which was slightly better than the 11.3% sip analysts predicted. In particular, semiconductor exports dropped 28.1%, Reuters reported. Imports declined 2.7% compared to the 8.1% relinquish expected.
Thursday’s trade numbers came amid an ongoing trade dispute between Seoul and Tokyo.
Wear month, Japan placed restrictions on exports of important high-tech materials to South Korea that are used by tech actors.
The situation could escalate further if Japan removes South Korea from a list of trusted trade pals that enjoy preferential treatment. Prime Minister Shinzo Abe’s cabinet plans to endorse Seoul’s removal from the soi-disant ‘white list,’ which is expected to go into effect late August, the Nikkei business daily reported.
Absent, Japan’s Nikkei 225 traded near flat while the Topix index added 0.12%. Australia’s S&P/ASX 200 penthouse 0.18%, as most of the sectors traded mixed.
The MSCI Asia ex-Japan index declined 0.43%.
Chinese factory work shrinks in July
A private survey showed Chinese factory activity contracted in July. The Caixin/Markit mill Purchasing Managers’ Index came in at 49.9 — slightly better than the 49.6 reading analysts had expected. PMI readings above 50 display expansion, while those below that signal contraction.
That number came after official details released Wednesday showed Chinese factory activity contracting for the third straight month in July.
Beijing’s relentless trade war with Washington was “part of the story” in China’s economic slowdown, according to Fraser Howie, an independent analyst. “I remember certainly from a sentiment perspective, the trade war is very significant,” he told CNBC’s “Street Signs” on Thursday.
But it wasn’t the “most important driver” of China’s economic story.
“The stories are domestic,” he said. “There are a lot of problems there, China’s not on the brink of come. I wouldn’t say it’s nicely humming along, I would say it’s more muddling through.”
The United States and China wrapped up a circular of trade talks on Wednesday and will resume negotiations in Washington in early September.
The two sides conducted “frank, unwasteful and constructive in-depth exchanges” on major economic and trade issues, according to Chinese state-run media Xinhua. The Wan House said Wednesday that both sides discussed topics such as forced technology transfer, pundit property rights, services, non-tariff barriers and agriculture.
U.S. President Donald Trump and Chinese President Xi Jinping reached a compact in June at the G-20 summit in Japan after trade talks collapsed in May that prompted a steep U.S. tariff hike on $200 billion of Chinese goods.
Fed
Overnight, the Fed cut rates by 25 base points in a widely expected move, citing “global developments” and “muted inflation” as reasons. But Fed Chairman Jerome Powell chilled hopes of further rate cuts later this year. He told reporters that Wednesday’s rate cut was “not the commencement of a long series of rate cuts.”
“Powell suggested the Fed isn’t in a long cutting cycle and that the cut was aimed at insuring against downside wide-ranging risks, he also added that the cut was not necessarily a one-off,” Felicity Emmett, from ANZ Research, wrote said in a morning note.
“This proffers the future policy path will depend on whether global data is feeding negatively back into the US. So far, the creating sector has shown weakness in line with the global slump, but the much larger services sector is holding up,” Emmett annexed.
Asia-Pacific Market Indexes Chart
Stocks finished lower on Wall Street overnight: The Dow closed 333.75 niceties down at 26,864.27 while the S&P 500 fell 1.1% to finish at 2,980.38. The Nasdaq Composite closed 1.2% downgrade at 8,175.42.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.822 after soaring from levels less 98.1 yesterday.
The Japanese yen traded at 109.18 against the dollar after weakening from the 108.5 handle in the foregoing session. Meanwhile, the Australian dollar changed hands at $0.6852 after dropping from highs around $0.690 yesterday.
Oil fees dropped Thursday morning during Asian trading hours, with the international benchmark Brent crude followings contract falling 1.51% to $64.07 per barrel. U.S. crude futures slipped 1.43% to $57.74 per barrel.
Here is a look at some of the materials set to be released later today:
- Hong Kong: Retail sales data for June at 4:30 p.m. HK/SIN
- Hong Kong earnings: Rating Chartered at 12:15 p.m. HK/SIN
- Japan earnings: Mitsubishi Corp, Mazda Motor, Asahi Group