Asian Markets Mixed as Data Shows China’s Economy Slowed in July
Stocks in Asia Pacific were mixed in Wednesday afternoon trade as uncertainty remains over the state of coronavirus relief stateside.
Mainland Chinese stocks were higher by the afternoon as they recovered from an earlier slip. The Shanghai composite was up 0.29% while the Shenzhen component added 0.893%. Hong Kong’s Hang Seng index gained 0.57%.
A private survey of China’s services sector in July showed a slower expansion as compared to the previous month, according to Reuters. The Caixin/Markit Services Purchasing Manager’s Index came in at 54.1, lower than June’s reading of 58.4. Still, the July figure was above the 50-mark that separates growth from contraction on a monthly basis.
“I don’t think this is concerning for the market because what we have seen (it’s) just a moderation from the last month,” Suresh Tantia, senior investment strategist at Credit Suisse’s APAC CIO office, told CNBC’s “Street Signs” on Wednesday. “If you look the broader trend, the macro data across the board in China has been improving.”
“Along with the services PMI, the manufacturing PMI has also been very strong in the last few months. Underlying data such as property sales has been in double digit(s), auto sales have also been growing at double digit(s) in the last few months,” Tantia said. “Broadly, the Chinese economy has been recovering from the pandemic and I think that is going to be very positive for the equity market.”
In Japan, the Nikkei 225 dipped 0.14% in afternoon trade while the Topix index was below the flatline. The moves came after Japanese stocks saw two solid days of gains earlier this week.
Meanwhile in Australia, the S&P/ASX 200 fell 0.45% while the South Korea’s Kospi jumped 1.14%. Overall, the MSCI Asia ex-Japan index gained 0.65%.
Investor focus on Wednesday was likely on coronavirus deal negotiations stateside, as lawmakers remain divided over issues such as unemployment insurance.
“Despite continuing negotiations, talks so far have yet to yield much in the way of progress,” Tapas Strickland, director of economics at National Australia Bank, wrote in a morning note. Still, Strickland said markets “sniff a deal” given the proximity of the elections in November.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.131 after declining from levels above 93.6 seen earlier.
The Japanese yen traded at 105.56 per dollar after touching levels around 106.4 earlier in the trading week. The Australian dollar changed hands at $0.7187 following its bounce from levels below $0.71 earlier this week.
Oil prices were lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down 0.11% to $44.38 per barrel. U.S. crude futures slipped 0.26% to $41.59 per barrel.