Asia report: Markets mostly higher as China manufacturing growth slows

Markets in Asia closed mostly higher on Monday, as investors digested the latest data on manufacturing in China.

In Japan, the Nikkei 225 was up 1.55% at 28,091.05, as the yen weakened 0.25% against the dollar to last trade at JPY 104.94.

Of the major components on the benchmark index, automation specialist Fanuc was up 1.06%, fashion firm Fast Retailing added 1.89%, and technology conglomerate SoftBank Group leapt 4.32%.

The broader Topix index was ahead 1.16% by the end of trading in Tokyo, closing at 1,829.84.

On the mainland, the Shanghai Composite managed gains of 0.64% to 3,505.28, and the smaller, technology-heavy Shenzhen Composite advanced 1.17% to 2,362.39.

The unofficial Caixin/Markit manufacturing purchasing managers’ index (PMI) came in at 51.5 for January, missing expectations for 52.7 according to a poll by Reuters.

It was, however, still above the 50-point mark that separates expansion from contraction.

The data from Caixin came after Beijing released its official manufacturing PMI data over the weekend, with the measure coming in at 51.3 for January.

That was also below expectations, with analysts polled by Reuters anticipating 51.6 for the month.

“The Caixin China manufacturing PMI fell to a seven-month low, faster than expected by analysts, hinting that the only bright spot of the world economy could also succumb to the renewed Covid pressure on its economic activity,” said Swissquote Bank senior analyst Ipek Ozkardeskaya.

“While the economic activity is normally slower into the Chinese New Year holiday, we could see a more-severe -than-usual slowdown in the run up and during Chinese festivities, as Chinese population will not be travelling to see their loved ones this year, and that’s some 800 million Chinese who won’t travel, eat, drink and ‘gan bei’ together, and offer gifts to their families.

“The data should confirm a certain slowdown in European and US activity as well, but a more significant contraction will likely hit services, as shops and restaurants have been the first line of defence in the face of the new lockdown measures to temper the additional waves of contagion.”

South Korea’s Kospi was 2.7% higher at 3,056.53, while the Hang Seng Index in Hong Kong was 2.15% firmer at 28,892.86.

The blue-chip technology stocks were stronger in Seoul, with Samsung Electronics up 1.22% and SK Hynix ahead 2.04%.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.64% at $55.39 per barrel, and West Texas Intermediate rising 0.38% to $52.40.

In Australia, the S&P/ASX 200 rose 0.84% to 6,663.00, as a number of mining plays rocketed in Sydney.

Adriatic Metals rose 19.82%, Argent Minerals was ahead 59.65%, and South32 was 3.94% firmer, as spot silver prices rose on the latest Reddit-fuelled investing craze.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 went in the opposite direction to its regional peers, slipping 0.23% to 13,097.25.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.03% stronger at AUD 1.3116, while the Kiwi weakened 0.17% to NZD 1.3944.