Asia report: Markets a mixed bag on slew of regional data

by | Aug 23, 2023

(Sharecast News) – Asia-Pacific markets delivered a mixed performance on Wednesday, on the back of diverse economic data points from a number of countries in the region.
Investor attention was divided by private business activity surveys from Australia and Japan, along with Singapore’s inflation figures.

“Asian equity markets displayed a mixed performance as a series of earnings reports and the latest PMI data influenced trading, all within a relatively narrow price range as the Jackson Hole symposium drew nearer,” said TickMill market analyst Patrick Munnelly.

“The Nikkei 225 started with initial losses but managed to recover, trading flat as it approached the 32,000 handle.

“This came after the release of somewhat mixed PMI figures.”

However, Munnelly said the market’s upward movement was limited due to ongoing concerns, including Japan facing criticism from China and Hong Kong over its plan to release water from the Fukushima nuclear plant.

“Meanwhile, the Hang Seng index saw a modest increase, while the Shanghai Composite declined under 1%.

“Hong Kong’s trading exhibited indecision, while the mainland market remained subdued.

“This could be attributed to the release of several earnings reports and the anticipation surrounding the forthcoming results from major Chinese banks.”

Markets show mixed performance amid key data releases

Japanese indices saw an uptick, with the Nikkei 225 rising by 0.48% to close at 32,010.26 points, and the Topix index similarly edged up by 0.5% to reach 2,277.05 points.

The Tokyo benchmark’s buoyancy was led by Panasonic Corporation with a 4.75% increase, followed closely by Kansai Electric Power Co at 4.02% and Sumitomo Dainippon Pharma Co, which appreciated by 3.8%.

On the contrary, China’s market sentiment wasn’t as upbeat as the Shanghai Composite slipped by 1.34% to conclude at 3,078.40 points, while the Shenzhen Component suffered a more significant drop of 2.14% to end at 10,152.60 points.

Notable losers of the day in Shanghai included Beijing Changjiu Logistics Corporation and China National Software & Service Co, both plunging by 10.01%.

Hong Kong’s Hang Seng Index recorded a modest rise of 0.31%, settling at 17,845.92 points.

Among the leaders in the special administrative region, ANTA Sports Products soared by 8.82%, Baidu ascended by 4.39%, and China Resources Beer Holdings appreciated by 2.46%.

South Korea’s Kospi index faced a decline of 0.41%, landing at 2,505.50 points, with significant drops from stocks like SD Biosensor, which plummeted by 8.99%, and SK IE Technology Co, which descended by 4.45%.

Australia’s S&P/ASX 200 index moved positively, rising by 0.38% to 7,148.40 points.

Domino’s Pizza Enterprises was the highlight, skyrocketing by 11.81%, accompanied by Idp Education which climbed 9.49%.

The S&P/NZX 50 in New Zealand experienced a growth of 0.75%, finishing at 11,571.93 points, with EBOS Group and A2 Milk Company standing out with gains of 6.02% and 3.73%, respectively.

On the currency front, the dollar was last down 0.38% on the yen, trading at JPY 145.34, while it held nearly steady against the Aussie, declining slightly by 0.05% to AUD 1.5562.

The greenback did, however, appreciate minutely against the Kiwi by 0.06%, to change hands at NZD 1.6827.

On the oil front, Brent crude futures diminished by 0.61% on ICE to $83.52 per barrel, and the NYMEX quote for West Texas Intermediate dipped by 0.67% to $79.11 per barrel.

Mixed trends in regional business activity

In economic news, au Jibun bank reported growth in Japan’s overall business activity in August, led by a robust expansion from the service sector.

The flash purchasing managers index (PMI) for the country stood at 52.6 in August, reflecting a slight increase from July’s 52.2.

While the manufacturing sector struggled, continuing its contraction for the third consecutive month at a PMI of 49.0, the services sector displayed resilience as its PMI improved to 54.3 in August from 53.8 in the prior month.

PMI readings above 50 signal expansion, whereas one below 50 signifies contraction.

“It is clear that Japan has not yet reached a self-sustaining growth cycle, and the Bank of Japan [has] acknowledged this,” said Kelvin Lam at Pantheon Macroeconomics.

“August’s flash PMI surveys also showed the lowest business expectations readings in both manufacturing and services since the first quarter, suggesting that businesses are cautiously optimistic about their future undertakings, thanks to slowing global demand and rising uncertainty.

“Moreover, with a potential squeeze on company margins because of the recent rise in input costs and a weaker yen, it adds challenges to businesses to raise nominal wages on a sustainable path.”

Singapore meanwhile recorded a year-on-year core inflation rate of 3.8% for July, aligning with projections set by Reuters polling, and marking a decline from the 4.2% seen in June.

The city-state’s headline inflation for the same month climbed by 4.1% when compared to the prior year, influenced by hikes in areas such as recreation, food, health care, and various goods and services.

Finally on data, Australia’s economic landscape wasn’t as optimistic in August, registering its most rapid contraction in business activity in nearly 19 months according to Juno Bank.

The flash composite PMI for August dipped to 47.1, a downturn from July’s 48.2.

August’s manufacturing PMI printed at 49.4, while the services sector PMI fell to a 19-month low of 46.7.

Reporting by Josh White for Sharecast.com.

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