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China markets rise after private survey shows Chinese factory activity grew; HSBC shares up 5%


SINGAPORE — Mainland China stocks rose along with most other Asia-Pacific indexes on Monday as a private survey on Chinese factory activity showed slight growth.

China’s Caixin/Markit manufacturing Purchasing Managers’ Index for July stood at 50.4, compared with the 51.5 predicted in a Reuters poll. In June, the reading was 51.7.

Still, the reading was better than China’s official Purchasing Managers’ Index data released over the weekend, which showed a contraction in factory activity.

Mainland China markets gained. The Shanghai Composite was 0.16% higher and the Shenzhen Component advanced 1.109%.

The contraction in China’s official manufacturing PMI … underscores the extent of the uncertainty around growth stemming from a rise in Covid cases, slowing global demand and property market risks.
Venkateswaran Lavanya
Economist, Mizuho Bank

PMI readings are sequential and represent month-on-month expansion or contraction. The 50 mark separates growth from decline.

“The contraction in China’s official manufacturing PMI to 49.0 in July from 50.2 in June underscores the extent of the uncertainty around growth stemming from a rise in Covid cases, slowing global demand and property market risks,” Venkateswaran Lavanya, an economist at Mizuho Bank, wrote in a Monday note.

“The poor start to Q3 further amplifies the risk that China will miss its 2022 GDP growth target of ‘around 5.5%.’ This against a backdrop of the authorities signaling last week that no big stimulus would be forthcoming even as the country sticks to its ‘dynamic zero-Covid’ policy,” Lavanya wrote.

Hong Kong’s Hang Seng index pared some losses but still shed 0.32% as shares of tech giant Alibaba lost 2.2%. The stock fell more than 5% earlier in the session.

On Friday in the U.S., Alibaba was added to a list of companies at risk of delisting under the Holding Foreign Companies Accountable Act. U.S.-listed shares plunged 11% in the regular trading Osession.

“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” the company said in a statement Monday.

HSBC announced a drop in pre-tax profit to $9.2 billion for the first half of 2022 on Monday, the company said in its interim results media release. That’s a $1.7 billion decrease, the bank said.

Japan’s Nikkei 225 gained 0.53% and the Topix index advanced 0.77%.

In Australia, the S&P/ASX 200 was 0.52% higher.

The Kospi in South Korea was about flat and the Kosdaq gained 0.48%.

MSCI’s broadest index of Asia-Pacific shares outside of Japan lost 0.11%.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.775, lower than last week’s levels.

The Japanese yen traded at 132.62 per dollar, stronger than levels seen early last week. The Australian dollar was at $0.6982.

Oil futures slipped more than 1% each. U.S. crude futures fell 1.37% to $97.27 per barrel, while Brent crude dropped 1.09% to $102.84 per barrel.

U.S. Stocks Poised to Fall on Monday

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