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Asian shares were mixed yesterday following data showing that Chinese manufacturing activity shrank further in July, adding to mounting concerns about the world’s second biggest economy.
Profit-takers also weighed on bourses following the previous day’s regional rally, although the Dow provided another record-breaking lead.
Tokyo slipped 0.32%, or 47.23 points, to 14,731.28 and Shanghai was down 0.52%, or 10.55 points, at 2,033.33. Hong Kong added 0.24%, or 53.51 points, to 21,968.93.
But Sydney rose 0.36%, or 18.0 points, to 5,035.1 and Seoul finished 0.42% higher, adding 7.93 points to 1,912.08.
HSBC’s preliminary Purchasing Managers’ Index (PMI) of Chinese manufacturing activity fell to 47.7 in July — an 11-month low — from a final reading of 48.2 in June.
A figure above 50 points to growth while anything below shows a contraction.
“The lower reading of the July HSBC Flash China Manufacturing PMI suggests a continuous slowdown in manufacturing sectors thanks to weaker new orders and faster destocking,” HSBC economist Qu Hongbin said in a statement.
The result is the latest in a series of data suggesting previous double-digit growth rates in China are a thing of the past as Beijing looks to shift its growth engine from exports to domestic consumption.
Shanghai at one point tumbled more than 1% but it pared those losses towards the end of the day.
The market had climbed almost 2% on Tuesday after a report that Premier Li Keqiang had said economic growth should not be allowed to fall below 7%. The comments suggested the government would be willing to step in with support should the economy look to be in trouble.
HSBC’s Qu added: “As Beijing has recently stressed to secure the minimum level of growth required to ensure stable employment, the flash PMI reinforces the need to introduce additional fine-tuning measures to stabilise growth.”
In Asian forex trading the dollar bought ¥100 compared with ¥99.48 in New York late on Tuesday, while the euro fetched $1.3237 and ¥132.39, against $1.3222 and ¥131.53.
In oil markets New York’s main contract, West Texas Intermediate for delivery in September, was up 17¢ at $107.40 a barrel and Brent North Sea crude for September delivery shed 22¢ to $108.20.
Gold cost $1,343.70 per ounce at 1100 GMT, compared with $1,328.50 late on Tuesday.
In other markets, Bangkok lost 0.79%, or 11.95 points, to 1,501.36; Jakarta fell 1.03%, or 49.06 points, to 4,718.10; Kuala Lumpur gained 0.26%, or 4.69 points, to 1,810.00; Manila rose 0.90%, or 60.95 points, to 6,804.16; Singapore gained 0.65%, or 21 points, to 3,274.76; Taipei dropped 0.22%, or 18.46 points, to 8,196.19; and Wellington rose 0.51%, or 18.61 points, to 4,599.20.