Data shows Chinese factory activity contracted in April

SINGAPORE — Shares in Asia-Pacific were down on Monday morning, with data released over the weekend showing Chinese factory activity contracted in April.

In Japan, the Nikkei 225 fell 0.54% as shares of robot maker Fanuc fell around 3%. The Topix index also lost 0.38%. The South Korean Kospi traded down 0.5%.

Australian stocks fell, with the S&P/ASX 200 falling 1.41%.

MSCI’s broadest Asia Pacific ex-Japan equity index traded down 0.55%.

Chinese economic data released over the weekend could weigh on regional investor sentiment on Monday. Chinese factory activity contracted at a faster rate in April as Covid lockdowns hit industrial production.

The official manufacturing purchasing managers’ index for April fell to 47.4, a second consecutive month of contraction after March’s reading of 49.5, data from the National Bureau of Statistics showed on Saturday.

The 50 point mark in the PMI readings separates growth from contraction. PMI readings are sequential and represent month-to-month expansion or contraction.

A private survey also showed a contraction in Chinese factory activity, with the Caixin/Markit manufacturing PMI coming in at 46, down from the previous month’s reading of 48.1.

“Omicron and the government’s zero-covid policy were the main culprits behind China’s slump in April, halting industrial production and disrupting supply chains,” National Australia Bank’s Rodrigo Catril wrote in a statement. note.

“A sharp slowdown in China’s economy in the second quarter remains a realistic outcome at this stage and if history is any guide, a blow to global growth would follow soon after,” said Catril, currency strategist at the society.

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The data comes as mainland China has been grappling for weeks with its worst Covid outbreak since 2020.

Markets in Hong Kong, mainland China, Singapore and Taiwan are closed Monday for a public holiday.

Currencies and Oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 103.356 after a recent jump from levels below 102.4.

The Japanese yen was trading at 130.16 to the dollar, even weaker from levels below 128 seen against the greenback last week. The Australian dollar was at $0.706 after falling more than $0.714 the previous week.

Oil prices were lower in the morning trading hours in Asia, with international benchmark Brent futures falling 0.51% to $106.59 a barrel. U.S. crude futures fell 0.34% to $104.33 a barrel.

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