Chinese shares decline as data shows July manufacturing activity contracted
August 01, 2019 @ 11:01 UTC
Asia Pacific markets were subdued Thursday afternoon as a private survey showed Chinese factory activity contracted in July. Mainland Chinese stocks slipped by the afternoon: The Shanghai composite fell 0.78% and the Shenzhen component declined 0.62%. The Shenzhen composite shed 0.549%.
Hong Kong’s Hang Seng index also declined 0.68% as shares of HSBC slipped 0.39%. The benchmark Kospi in South Korea returned to negative territory and slipped fractionally. Shares of major chipmaker SK Hynix were up 1.3% while Samsung Electronics declined 0.33%.
Trade data for July showed South Korean exports fell 11% on-year, which was slightly better than the 11.3% drop analysts predicted. In particular, semiconductor exports dropped 28.1%, Reuters reported. Imports declined 2.7% compared to the 8.1% drop expected.
A private survey showed Chinese factory activity contracted in July. The Caixin/Markit factory Purchasing Managers’ Index came in at 49.9 — slightly better than the 49.6 reading analysts had expected. PMI readings above 50 indicate expansion, while those below that signal contraction. That number came after official data released Wednesday showed Chinese factory activity contracting for the third straight month in July.
Overnight, the Fed cut rates by 25 basis points in a widely expected move, citing “global developments” and “muted inflation” as reasons. But Fed Chairman Jerome Powell dampened hopes of further rate cuts later this year. He told reporters that Wednesday’s rate cut was “not the beginning of a long series of rate cuts.”