Asian markets rise after strong Chinese manufacturing data
Asian markets rose today after strong readings on China’s vast manufacturing sector offset the weak lead from a softer Wall Street session.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent, to regain some ground it had lost on Monday.
The Hang Seng Index in Hong Kong traded 0.18 per cent higher while the Shanghai Composite also recovered early losses to stand 0.1 per cent higher. Japan’s Nikkei 225 erased early losses to trade flat.
The Caixin/Markit Manufacturing Purchasing Managers’ Index(PMI) showed China’s factory activity expanded at the fastest clip in nearly a decade in August, bolstered by the first increase in new export orders this year.
“What we are seeing here is the slow but choppy export recovery that is taking a bit longer than maybe some market participants thought it would – and that’s because markets remain largely out of sync,” said Daniel Gerard, senior multi asset strategist at State Street Global Markets, based in Singapore.
“September is also going to be a choppy recovery, and until we get closer to more news about a vaccine it’s going to remain that way.”
Taiwan stocks gained 0.5 per cent after the US said on Monday it was establishing a new bilateral economic dialogue with the country, an initiative it said was designed to support Taipei.
Australia’s S&P/ASX 200 was an outlier, declining 2.4 per cent to four-week lows on rising diplomatic tensions between Canberra and Beijing.
On Wall Street, the Dow Jones Industrial Average and the S&P 500 ended in the red overnight, while the Nasdaq rose solidly.
The S&P gained more than seven per cent for the month to record its best August since 1986 in what is traditionally a softer month for stock performance.
Wall Street declines overnight were mostly caused by month-end portfolio rebalancing “rather than a new trend in equities,” said Rodrigo Catril, senior FX strategist at NAB Market Research in Sydney.
The Nasdaq fared even better than the S&P for the month, up nearly 10 per cent as it rallied for a fifth straight month.