Asian markets gain even as China’s manufacturing slows

Asian markets gain even as China’s manufacturing slows

Chinese tech companies mixed in Hong Kong trading

SINGAPORE — Asian stocks started the week higher Monday, even as China reported a slowdown in manufacturing activity and countries in the region continued to be hammered by the delta variant.

Tokyo’s Nikkei 225 JP:NIK jumped 1.9%, while the Kospi KR:180721 in Seoul rose 0.3%. The Hang Seng HK:HSI in Hong Kong advanced 0.9% after being in the red for much of the morning.

The Shanghai Composite index CN:SHCOMP added 1.5%, while Australia’s S&P/ASX 200 AU:XJO was up 1.3%. Benchmarks in Malaysia MY:FBMKLCI and Taiwan TW:Y9999 rose while those in Singapore SG:STI and Indonesia ID:JAKIDX fell.

The gains in China follow data released Saturday by the National Bureau of Statistics showing the country’s official purchasing managers’ index fell to 50.4 in July from 50.9 in June. Numbers above 50 indicate expansion on the 100-point scale.

On Monday, a monthly manufacturing survey issued by a business magazine, Caixin, put July’s reading at 50.3. That was down from June’s 51.3.

The official figure was the lowest since February 2020, when a lockdown to prevent the spread of the coronavirus was in place. Analysts had expected a smaller easing of manufacturing activity.

China is also dealing with an outbreak of the delta variant of the coronavirus, which has already been running rampant in many other Asian nations.

“None of the factors for slower manufacturing and non-manufacturing growth have gone away,” Iris Pang of ING said in a report.

“In fact, more policy directions were announced on 30 July, and they are directly from a meeting chaired by President Xi. Those policies aim at solving problems to achieve long-term economic stability, which could sacrifice short-term growth momentum,” she said.

Investors are also watching a crackdown by Beijing on Chinese tech companies, even as authorities moved to soothe fears.

Games and social media giant Tencent Holding Ltd. HK:700 fell 2.8% in Hong Kong on Monday. However, internet search giant Baidu Inc. HK:9888 was up 2.4% and e-commerce giant Alibaba Group HK:9988 gained 1.1%.

“Despite the long-term prospects of Chinese stocks, we think the stringency of recent regulatory actions will likely keep foreign investors on the edge for now until the sentiment starts improving,” Nomura research analysts said in a note.

On Wall Street on Friday, indexes stumbled while wrapping up another strong month. The S&P 500 SPX, which marked six straight month of gains, lost 0.5% to 4,395.26.

The Dow Jones Industrial Average DJIA shed 0.4% to 34,935.47. The Nasdaq composite COMP dropped 0.7% to 14,672.68.

In other trading, U.S. benchmark crude oil CLU21 lost 98 cents to $72.97 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil BRNV21 declined $1.11 to $74.30.

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