Asia report: Markets mixed as China manufacturing sector rebounds

Markets in Asia finished in a mixed state on Tuesday, as investors digested some stellar manufacturing data out of China.

In Japan, the Nikkei 225 was down 0.007% at 23,138.07, as the yen strengthened 0.14% against the dollar to last trade at JPY 105.76.

Technology conglomerate SoftBank Group was down 1.2%, while among the benchmark’s other major components, automation specialist Fanuc was up 0.38% and fashion firm Fast Retailing rose 0.16%.

The broader Topix index lost 0.15% by the end of trading in Tokyo, ending its session at 1,615.81.

On the mainland, the Shanghai Composite gained 0.44% to 3,410.61, and the smaller, technology-heavy Shenzhen Composite was 0.67% firmer at 2,310.85.

Fresh data out of China showed the country’s manufacturing sector as growing at the fastest pace in almost a decade, as the unofficial Caixin/Markit manufacturing purchasing managers’ index (PMI) came ina t 53.1 for August.

That was on the back of Beijing’s official reading of 51.0 for the month on Monday - both of which were above the 50-point mark which separates expansion from contraction.

Jeffrey Halley, senior Asia-Pacific market analyst at Oanda, said the data reinforced the idea that China was leading the region out of the pandemic recession.

“The result was more pleasing as the official manufacturing PMI yesterday stalled, even as services surged,” he said.

“The net result between the two releases suggests that China is firing on nearly all its cylinders.”

South Korea’s Kospi rose 1.01% to 2,349.55, while the Hang Seng Index in Hong Kong advanced 0.03% to 25,184.85.

The blue-chip technology stocks were both higher in Seoul, with Samsung Electronics up 0.37%, and chipmaker SK Hynix advancing 0.13%.

Oil prices were higher at the end of the Asian day, with Brent crude last up 1.02% at $45.74, and West Texas Intermediate adding 1.08% to $43.07.

In Australia, the S&P/ASX 200 slid 1.77% to 5,953.40, as the Reserve Bank of Australia sates market expectations and stood pat on both bond yield targets, and its 0.25% cash rate.

The central bank’s governor, Philip Lowe, said it was looking to expand its term funding facility for banks as well.

“Under the expanded term funding facility, authorised deposit-taking institutions will have access to additional funding, equivalent to 2% of their outstanding credit, at a fixed rate of 25 basis points for three years,” Lowe announced.

“Authorised deposit-taking institutions will be able to draw on this extra funding up until the end of June 2021.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 1.21% to 11,793.16, led lower by its major exporters, with specialist dairy firm A2 Milk down 1.56% and medical device maker Fisher & Paykel Healthcare off 3.64%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.14% at AUD 1.3539, and the Kiwi advancing 0.53% to 1.4774.