Weak Chinese data drags Asian equities lower... It’s not just China that’s a concern...
Weak Chinese data drags Asian equities lower
China’s main index closed down more than 2 per cent Wednesday as investors digested the latest show of weakness in the world’s second largest economy.
The flash PMI data showed a 6.5 year low for manufacturing with a reading of 47.0 in September, below the 50.0 mark at which growth tips into contraction. Most Asian markets closed with losses; Tokyo reopens Thursday after a three-day holiday.
European indexes have shrugged off weak data so far and the major markets are trading with gains.
The TSX and Wall Street are expected to open higher after losses in Tuesday’s session.
It’s not just China that’s a concern
Weak data from China has become a regular occurrence but there are other signs that the global economy is not gathering enough pace. Eurozone flash readings for services and manufacturing by Markit show September figures are lower than expected. Although there was still growth in the PMI at 53.9, it was down from the 54.3 in August and below expectations from a Reuters poll which predicted 54.1.
Taiwan has also raised concerns that its exports are weaker than hoped and the country’s central bank is considering cutting its interest rates which have been at 1.875 per cent since 2011.
Meanwhile a survey of Indian businesses shows sentiment has fallen for the third consecutive month. Although the index is still showing positive sentiment there is concern that weaker demand globally is holding back Indian companies’ growth.
China’s main index closed down more than 2 per cent Wednesday as investors digested the latest show of weakness in the world’s second largest economy.
The flash PMI data showed a 6.5 year low for manufacturing with a reading of 47.0 in September, below the 50.0 mark at which growth tips into contraction. Most Asian markets closed with losses; Tokyo reopens Thursday after a three-day holiday.
European indexes have shrugged off weak data so far and the major markets are trading with gains.
The TSX and Wall Street are expected to open higher after losses in Tuesday’s session.
| Latest | 1 month ago | 1 year ago | |
| North America (previous session) |
|||
| US Dow Jones | 16,330.47 (-1.09 per cent) | -0.79 per cent | -4.25 per cent |
| TSX Composite | 13,491.09 (-2.09 per cent) | +0.13 per cent | -10.81 per cent |
| Europe (at 5.40am ET) |
|||
| UK FTSE | 6,015.40 (+1.34 per cent) | -2.78 per cent | -9.90 per cent |
| German DAX | 9,674.79 (+1.09 per cent) | -4.44 per cent | +0.83 per cent |
| Asia (at close) |
|||
| China CSI 300 | 3,263.03 (-2.28 per cent) | -9.10 per cent | +35.99 per cent |
| Japan Nikkei | 18,070.21 (-1.96 per cent) | -7.03 per cent | +10.72 per cent |
| Other Data (at 5.40am ET) |
|||
| Oil (Brent) | Oil (WTI) | Gold | Can. Dollar |
| 49.61 (+1.08 per cent) |
46.78 (+0.91 per cent) |
1126.10 (+0.12 per cent) |
U$0.7537 |
| Aus. Dollar |
|||
| U$0.7040 | |||
It’s not just China that’s a concern
Weak data from China has become a regular occurrence but there are other signs that the global economy is not gathering enough pace. Eurozone flash readings for services and manufacturing by Markit show September figures are lower than expected. Although there was still growth in the PMI at 53.9, it was down from the 54.3 in August and below expectations from a Reuters poll which predicted 54.1.
Taiwan has also raised concerns that its exports are weaker than hoped and the country’s central bank is considering cutting its interest rates which have been at 1.875 per cent since 2011.
Meanwhile a survey of Indian businesses shows sentiment has fallen for the third consecutive month. Although the index is still showing positive sentiment there is concern that weaker demand globally is holding back Indian companies’ growth.
