Asian stocks endured another mixed day on Thursday with a drop in China’s factory activity being the biggest influence on prices, though there was optimism the latest data due out of the US might lead to an end to the Fed’s interest rate campaign.
The bargain buyers also swooped in but overall sentiment remained gloomy and shares across the region were set for their worst month since February.
Japan’s Nikkei share average rose for a fourth straight session, as investors bought back beaten down growth stocks, while Toyota Motor led automakers higher after posting a record monthly global sales.
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The Nikkei share average was up 0.88%, or 285.88 points, to close at 32,619.34, while the broader Topix was ahead 0.80%, or 18.62 points, to 2,332.00.
Toyota Motor jumped 2.38% after the automaker reported an 8% jump in July global sales to a record 859,506 vehicles.
China and Hong Kong stocks slipped, and were poised to end the month lower, as official data showed factory activity in the world’s second-largest economy shrank again in August.
China’s manufacturing activity contracted for a fifth straight month in August but improved from July, maintaining pressure on officials to provide more economic stimulus.
The August purchasing managers’ index (PMI) survey showed better-than-expected manufacturing activity but worse-than-expected non-manufacturing activity, Goldman Sachs analysts said in a note.
The slowdown in the services PMI suggests “activity in other services industries such as property may have deteriorated further in August,” they said.
That came as China’s largest private property developer Country Garden posted a record half-year loss of 48.9 billion yuan ($6.72 billion) for the first six months.
The Shanghai Composite Index dropped 0.55%, or 17.26 points, to 3,119.88, while the Shenzhen Composite Index on China’s second exchange lost 0.58%, or 11.40 points, to 1,947.48.
China ChatGPT Approvals
Meanwhile, Hong Kong-listed tech giants went up 0.4% as China started to approve domestic ChatGPT-like products.
But the Hang Seng Index fell 0.55%, or 100.80 points, to 18,382.06, while the Hang Seng China Enterprises Index dipped 0.38%.
Elsewhere across the region, in earlier trade, Sydney, Singapore and Jakarta rose, but Seoul, Mumbai, Wellington, Taipei and Manila fell.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.3% and was headed for a monthly loss of 6.3%, the largest since February.
Europe was likely to open in a subdued manner, with Eurostoxx 50 futures up a slight 0.1%. Both S&P 500 futures and Nasdaq futures were little changed.
Overnight, Wall Street rose after a slew of US economic indicators generally surprised to the downside, adding to bets that the Federal Reserve is done tightening and rate cuts next year could amount to more than 100 basis points.
Private payrolls clocked a 52.3% monthly drop, adding to signs of a softening in the labour market, while second-quarter GDP was revised lower.
Oil Prices Flat
Attention now turns to inflation numbers as measured by the US personal consumption expenditures (PCE) on Thursday – the Federal Reserve’s preferred gauge of inflation – and non-farm payrolls on Friday.
Action in the Treasuries market was muted after a brutal sell-off earlier this month. Ten-year yields held at 4.1140%, having steadied in the past few sessions. They were nonetheless 16 basis points higher in August.
Two-year yields stood at 4.8899% on Thursday, after briefly dipping to a three-week low of 4.8360% overnight.
There was, however, less cheer in Europe on the inflation front. Annual inflation in Germany and Spain barely slowed in August, against expectations, raising the stakes for the euro zone inflation numbers later in the day.
Bets that the European Central Bank will have to hike in September saw the euro surge on the yen, hitting a 15-year high of 159.76 yen overnight. It last hovered at 159.4 yen on Thursday.
Oil prices were mostly flat. Brent crude futures were little changed at $85.90 per barrel and US West Texas Intermediate crude futures were steady at $81.67.
Key figures
Tokyo – Nikkei 225 > UP 0.88% at 32,619.34 (close)
Hong Kong – Hang Seng Index < DOWN 0.55% at 18,382.06 (close)
Shanghai – Composite < DOWN 0.55% at 3,119.88 (close)
London – FTSE 100 > UP 0.06% at 7,477.84 (0933 BST)
New York – Dow > UP 0.11% at 34,890.24 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
China’s Manufacturing Falls for 5th Month, Services Also Down
Country Garden Voices ‘Deep Remorse’ for $6.7bn First Half Loss
China’s Move to Slow Down IPOs May Backfire on Frail Economy
Bargain Buyers Lift Nikkei, Hang Seng Flat on Global Worries
