SINGAPORE: Asia’s stock markets slid toward a second month of losses in a row on Wednesday, and even the glittering Nikkei paused, as weak Chinese factory activity fed growing doubts about the post-pandemic recovery in the world’s second-biggest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1 percent in early trade and is down 2.4 percent in a month where hopes for a robust Chinese rebound have run dry.
Data showed Chinese manufacturing activity contracted faster than expected this month on weakening demand, with the official manufacturing purchasing managers’ index down to 48.2 against a forecast of 49.4.
The yuan fell to a six-month low of 7.1090 per dollar after that and is down more than 2.6 percent on the month as indicators from output to industrial profits, retail sales, and loan growth have missed forecast and in some cases slumped.
“There were concerns China’s economic comeback could be so strong that it would complicate advanced economy central banks’ fight against inflation,” said Carol Kong, economist, and currency strategist at the Commonwealth Bank of Australia.
“Fast forward to today, those expectations look misplaced.”
The disappointment has filtered through to other China-sensitive assets. The Australian dollar is sliding towards a fourth consecutive monthly loss and at $0.6492 is barely above last week’s seven-month lows.
Hong Kong’s Hang Seng is down 8 percent in May and fell 1.6 percent on Friday.
Even stocks in Asia’s brightest market, Japan, took a breather on Wednesday. The benchmark Nikkei fell 0.8 percent, though that caps a 7.7 percent monthly gain that’s driven the index above 31,000 to its highest levels in more than 30 years.
Source: Reuters
