Asian Markets Mixed as US-China Tariffs Take Effect

Hong Kong (CNN Business)Asian markets were mixed Monday as new US-China tariffs took effect and several countries reported economic data for the last month.

Hong Kong’s Hang Seng Index (HSI) lost 0.8%, while Japan’s Nikkei(N225) fell 0.2%.
But China’s Shanghai Composite Index (SHCOMP) advanced 0.7% and South Korea’s Kospi (KOSPI) ticked up by 0.1%.

The latest round of tariffs that the United States and China imposed on each other went into effect Sunday — a round that came as concerns about slowing global growth are building and fear of recession stalks several major economies. Investors and executives around the world are also waiting to see when the two economic superpowers will come back to the negotiating table.

Newly released economic data also suggested that long-term concerns remain an issue. China’s manufacturing industry expanded in August to a five-month high, according to a survey released Monday by the media group Caixin. That was stronger than what analysts expected, though government figures released over the weekend showed a contraction in activity.

The Caixin data suggests that strong infrastructure spending is propping up factory activity in China, according to Julian Evans-Pritchard, senior China economist at Capital Economics. But exports continue to struggle.
The manufacturing indexes are consistent with a slowdown in year-on-year economic growth, he wrote in a research note, adding that the outlook for global demand is still cloudy.
Evans-Pritchard wrote that Chinese authorities will have “little choice” but to ease policy in the coming months to deal with those issues.

Here are the other big moves at 10:30 a.m. Hong Kong time:

  • Newly released factory activity from Japan pointed to a continued downturn in the country’s manufacturing sector. “The sector was plagued by production cutbacks and flagging demand, which have been the trends so far in 2019,” said Joe Hayes, an economist at IHS Markit, in a note. “Softer growth across Asia, particularly in China, was reported to have dented export opportunities.”
  • South Korea’s manufacturing activity contracted in August at a slower pace than it did in July, according to data released Monday.
    In China, defense stocks pulled higher. A military parade is scheduled October 1 to celebrate the 70th anniversary of the founding of the People’s Republic of China.
  • The yuan weakened slightly in both onshore and offshore trading. The Chinese central bank fixed the yuan at 7.0883 per oneUS dollar on Monday, slightly weaker from Friday’s 7.0879.


Main Source: CNN Business