Asian stocks rise, Hong Kong slumps on weak factory data
Stocks were mostly higher in Asia on Monday after a strong close on Wall Street last week, although the latest manufacturing surveys showed weakening factory activity in the region’s biggest economies.
Tokyo, Shanghai and Sydney advanced while Hong Kong and Seoul declined. US futures fell and oil prices lost more than $1 a barrel.
On Friday, Wall Street closed its best month since November 2020. The S&P 500 index, a benchmark for many equity funds, rose 1.4% and ended up 9.1% in July.
A rebound in tech stocks, large retailers and other companies that rely on direct consumer spending helped generate large gains in July, though the index is still down 13.3% for the year.
Tokyo’s Nikkei 225 gained 0.5% to 27,948.50 while the Shanghai Composite Index edged up 0.2% to 3,258.46. In Sydney, the S&P/ASX 200 rose 0.4% to 6,972.80. Seoul’s Kospi fell 0.1% to 2,448.47 and Hong Kong’s Hang Seng fell 0.3% to 20,091.11.
The recovery of China’s manufacturing industry from antivirus shutdowns faltered in July as activity tumbled, a survey showed on Sunday, adding to pressure on the struggling economy in a politically sensitive year in which President Xi Jinping is expected to try to extend his term in power.
Factory activity has been depressed by weak global demand and virus controls weighing on domestic consumer spending, according to the national statistics agency and an official industry group, the China Logistics and Purchasing Federation. .
A similar survey of purchasing managers, the Jibun Bank Japan manufacturing PMI, slipped to 52.1 in July from 52.7 in June, the sector’s slowest growth in 10 months, as manufacturing costs energy and labor have increased. The survey measures various components on a scale of up to 100, with readings above 50 indicating expansion.
Investors in the region will receive a fresh slice of corporate earnings updates this week. Wall Street’s latest rally came as investors weighed a mix of corporate earnings reports and new data showing inflation jumped the most in four decades last month.
The tech-heavy Nasdaq rose 1.9%, ending the month up 12.4%, while the Dow Jones Industrial Average rose 1% and posted a 6.7% gain for the month. The Russell 2000 rose 0.7%, ending July with a 10.4% gain.
Weak economic data, including a report on Thursday showing the U.S. economy contracted last quarter and could be in recession, also boosted stocks higher by giving some investors reassurance that the Federal Reserve will be able to slow its aggressive pace of rate hikes sooner. provided that.
The central bank on Wednesday raised its main short-term interest rate by 0.75 percentage points, taking it to its highest level since 2018. The Fed is raising rates in a bid to slow the US economy and rein in inflation.
An inflation gauge closely watched by the Federal Reserve jumped 6.8% in June from a year ago, the biggest increase in four decades, leaving Americans with no relief from soaring prices . Month-over-month inflation accelerated to 1% in June from a monthly rise of 0.6% in May, the Commerce Department said on Friday.
In Europe, inflation jumped in July, reaching 8.9% in the 19 European countries that use the euro.
In other trading, the benchmark U.S. crude oil lost $1.31 to $97.31 a barrel. It jumped $2.20 to $98.62 on Friday. Brent crude, the pricing basis for international oils, fell $1.04 to $102.93 a barrel.
The US dollar fell to 132.48 Japanese yen from 133.25 yen. The euro fell from $1.0223 to $1.0228.