HONG KONG–Asian markets fell Monday as China shares were dragged down by poor manufacturing figures and investors followed a drop on Wall Street.
Chinese investors monitor displays of stock information at a brokerage house in Beijing on July 28, 2015. Asian markets fell Monday, Aug. 3, as China shares were dragged down by poor manufacturing figures and investors followed a drop on Wall Street. AP PHOTO/MARK SCHIEFELBEIN
A private survey of Chinese manufacturing activity showed a decline to a two-year low in July, suggesting the world’s second-largest economy faces challenges in the third quarter.
Shanghai slipped 1.11 percent, or 40.82 points, to end at 3,622.91, while Hong Kong shed 0.91 percent, or 224.86 points, to close at 24,411.42.
Japan’s benchmark Nikkei 225 index slipped 0.18 percent, or 37.13 points, to finish at 20,548.11, while Seoul fell 21.67 points, or 1.07 percent, to close at 2,008.49.
Sydney eased 0.35 percent, or 19.9 points, to 5,679.3 ahead of the central bank’s monthly monetary policy meeting Tuesday.
Investor sentiment in China reflected the final reading of Caixin’s Purchasing Managers’ Index (PMI), which came in at 47.8 for July.
The figure was below the 49.4 registered in June and was the weakest reading since 47.7 in July 2013. A figure above 50 signals growth and anything below indicates contraction.
An official purchasing managers’ index released at the weekend had already shown a decrease for the month, decelerating to 50.0 from 50.2 in June.
Analysts predicted China’s government would further ease credit in the second half of 2015 to try to shore up growth.
“Fiscal policies will be the key to growth stabilization measures in the second half,” Zhu Qibing, a Beijing-based macroeconomic analyst at China Minzu Securities Co., told Bloomberg News.
“The government’s recent signals and policy direction clearly show that a new round of fiscal stimulus is coming,” he said.
HSBC, meanwhile, announced Monday in Hong Kong that net profit fell 3.8 percent in the three months to June, as the company agreed to sell its Brazilian business for $5.2 billion to Brazil’s Banco Bradesco.
But the company emphasized a rise in pre-tax profits, which went up 10 percent over six months, pushing shares up 1.35 percent to end at HK$71.05 (US$9.17) compared with Friday trade.
Oil prices down
Investors in Japan were, meanwhile, weighing earnings while energy-related shares were pushed lower as oil extended its biggest monthly drop in seven years.
Shares in automaker Honda bucked the trend with an 8.77-percent jump to 4,328 yen after it reported surging profits.
Asian markets had a negative lead from Wall Street where stocks closed lower Friday following poor earnings from ExxonMobil and Chevron.
Oil prices were lower in Asian trade over concerns about a supply glut. US benchmark West Texas Intermediate for September fell 76 cents to $46.37 while Brent crude for September eased $1.11 to $51.12.
Prices were facing downward pressure following “signs that top producers in the Middle East were continuing to pump at record levels despite a growing global glut,” said Singapore’s United Overseas Bank in a commentary.
In Tokyo forex markets, the dollar rose against the euro and yen after falling in US trade owing to a weak report on workers’ pay that reignited questions about the timeline for an interest rate rise.
In afternoon trade the greenback fetched 124.05 yen, edging up from 123.91 yen in New York late Friday.
The euro bought $1.0976 and 136.15 yen against $1.0984 and 136.10 yen in US trade.
Gold fetched $1,092.73 an ounce compared with $1,098.40 on Friday.
In other markets:
— Mumbai rose 0.26 percent, or 72.50 points, to end at 28,187.06 points.
State Bank of India climbed 3.94 percent to 281.05 rupees, while miner Vedanta Limited fell 2.50 percent to 126.90 rupees.
— Singapore closed down 0.30 percent, or 9.71 points, to 3,192.79.
Singapore Telecom fell 0.49 percent to Sg$4.07 while DBS Bank gained 0.20 percent to Sg$20.22.
— Kuala Lumpur’s main index rose 1.22 percent, or 21.05 points, to close the day on 1,721.50.
Public Bank added 0.32 percent to 19.06 ringgit, RHB Capital gained 0.54 percent 7.47 while Malayan Banking lost 0.22 percent to 9.18 ringgit.
— Jakarta ended down 0.05 percent, or 2.34 points, at 4,800.
Food manufacturer Tiga Pilar Sejahtera Food gained 1.30 percent to 1,950 rupiah, while palm oil producer Astra Agro Lestari fell 1.37 percent to 19,800 rupiah.
— Bangkok rose 0.13 percent, or 1.92 points, to 1,442.04
Kasikorn Bank gained 1.97 percent to 181.50 baht, while telecoms company Advanced Info Service dropped 1.20 percent to 247 baht.
— Taipei fell 140.93 points to finish at 8,524.41.
Taiwan Semiconductor Manufacturing Co. closed down 3.58 percent at Tw$134.5.Hon Hai dropped 1.65 percent to Tw$89.2
— Wellington ended up 0.62 percent, or 36.89 points, at 5,957.85.
Air New Zealand rose 1.89 percent to NZ$2.69 and Contact Energy rose 1.41 percent at NZ$5.02.
— Manila ended 0.31 percent higher, rising 23.26 points to 7,573.26.
Top-traded GT Capital added 0.29 percent to 1,404 pesos while Globe Telecom gained 2.09 percent to 2,634 pesos.–Jennifer O’Mahony