Asia-Pacific markets decline as China’s business activity data disappoints

Asia-Pacific markets fell on Monday, as investors took stock of China’s latest business activity figures and anticipated a series of upcoming economic reports.

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The decline was broad-based, with several key indices in the region experiencing notable drops.

China’s manufacturing PMI drops

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China’s official purchasing managers’ index (PMI) for August showed a decline to 49.1, marking a six-month low.

This figure represents a faster contraction compared to July’s 49.4 and is below the median forecast of 49.5 from economists surveyed by Reuters.

The PMI has now remained in contraction territory for four consecutive months, reflecting ongoing challenges in the manufacturing sector.

In contrast, China’s non-manufacturing PMI edged up to 50.3 from 50.2 in July.

This index, which measures activity in the services and construction sectors, indicates a modest improvement but does not fully offset the concerns raised by the manufacturing data.

Hong Kong, China indices fall on real estate woes

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The Hong Kong Hang Seng Index fell by 1.68% on Monday, while China’s CSI300 index dropped by 1.2%, with the decline largely attributed to weak performance in the real estate sector.

Property developer New World Development led the losses, with its shares plummeting by 14.14% after the company forecast a significant financial loss of approximately 19 to 20 billion Hong Kong dollars for the financial year 2024.

Economic analyst Haibin Zhu noted that recent policies, such as potential mortgage refinancing measures, are not expected to significantly revive the housing market.

Instead, these measures are seen as supporting consumption rather than directly boosting new home demand.

Japan’s indices show mixed results

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Japan’s Nikkei 225 index rose by 0.35% on Monday, briefly surpassing the 39,000 mark for the first time since July 31. The broader Topix index increased by 0.11%.

In contrast, South Korea’s Kospi index experienced only a marginal rise, while the Kosdaq index fell by 0.30%.

Australia’s S&P/ASX 200 index also slipped by 0.27%, reflecting the broader regional trend of declining markets.

US markets post record highs

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In the US, the Dow Jones Industrial Average set a new record high on Friday, closing up by 0.55% at 41,563.08. The S&P 500 and Nasdaq Composite also advanced, gaining 1.01% and 1.13%, respectively.

Traders are closely monitoring inflation data, particularly the personal consumption expenditures (PCE) price index, which rose by 0.2% on a monthly basis in July and 2.5% year-over-year.

These figures align with economists’ expectations and are crucial for the Federal Reserve’s policy considerations.

Economic outlook remains uncertain

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Investors in the Asia-Pacific region are awaiting additional economic data throughout the week, including inflation figures from South Korea, second-quarter GDP data from Australia, and pay and household spending statistics from Japan.

These upcoming reports are likely to influence market sentiment as investors seek clarity on regional economic trends.