Asian markets were mixed as China reported strong manufacturing activity
BEIJING – Asian stock markets were mixed on Thursday after the US economy contracted and China reported stronger factory activity.
Nikkei 225 NIK Index,
In Tokyo, it fell 1.3% after industrial production for the month of June fell 7.2% from the previous month. This was the largest drop since the start of the coronavirus pandemic in early 2020.
Shanghai SHCOMP Composite Index,
It rose 1.3% after a rise in the official monthly measure of factory activity and an improvement in new orders. The Hang Seng HSI,
In Hong Kong it rose 0.1%.
The Kospi 180721,
In Seoul it fell 1% and the S&P/ASX 200 XJO in Sydney,
It decreased by 0.4%. Singapore Standard Indicators STI,
and Taiwan Y9999,
fell, while shares in Indonesia JAKIDX rose,
Wall Street’s benchmark S&P 500 fell 0.1% on Wednesday after data showed the US economy contracted in the first quarter amid rising inflation and weak consumer confidence.
Investors are uneasy about signs that the world’s largest economy may be in recession due to higher interest rates imposed to cool rising inflation.
“Demand for stocks could remain muted for at least four to six months, as higher interest rates operate in the US economy,” Stephen Innes of SBI Asset Management said in a report.
S&P 500 SPX Index,
It fell to 3,818.83 after official data showed economic activity contracted 1.6% at an annual rate in the three months ending in March. It was the first contraction since the second quarter of 2020 in the depths of the pandemic.
The US benchmark is down 7.6% for the month and 20% from its January 3 peak.
Dow Jones Industrial Average DJIA,
It rose 0.3% to 31,029.31. Nasdaq Composite,
It fell less than 0.1% to 11,177.89.
“Not only is the recession the base case, but I think it has already started,” said Liz Ann Saunders, chief investment analyst at Charles Schwab.
Federal Reserve Chairman Jerome Powell, speaking at the European Central Bank meeting in Portugal, on Wednesday, said there was “no guarantee” that inflation could be tamed without hurting the labor market.
The global economy has been disrupted by China’s anti-virus measures that shut down Shanghai and other industrial centers and Russia’s invasion of Ukraine, driving up prices for oil, wheat and other commodities.
The monthly Purchasing Managers’ Index released Thursday by China’s statistics agency and an industry group rose to 50.2 in June from 49.6 on a 100-point scale. Figures above 50 indicate increased activity. This came after factories, shops and offices were allowed to reopen in Shanghai and other cities.
In energy markets, the US crude benchmark CLQ22,
He gained 35 cents to $110.13 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 on Wednesday to $109.78. Brent crude BRNQ22,
The international oil price basis added 50 cents to $112.95 a barrel in London. It fell $1.72 in the previous session to $116.26. per barrel.
It rose to 136.62 yen from 136.54 yen on Wednesday.