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Asian shares mixed after weak HSBC China flash PMI survey

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Investing.com -

Investing.com - Asian shares were mixed Thursday after a weak report on Chinese manufacturing activity.

The Hang Seng was down 0.6%, after HSBC reported that its flash China manufacturing Purchasing managers index for August fell to 50.3 from 51.7 in July. The Shanghai Composite Index was down 0.3%.

"Both domestic and external new orders rose at slower rates compared to the previous month," said HSBC chief China economist Qu Hongbin.

"Meanwhile, disinflationary pressure returned as input and output prices contracted over the month. Today's data suggest that the economic recovery is still continuing but its momentum has slowed again. Therefore, industrial demand and investment activity growth will likely stay on a relatively subdued path. We think more policy support is needed to help consolidate the recovery. Both monetary and fiscal policy should remain accommodative until there is a more sustained rebound in economic activity."

Expectations for continued low interest rates in the U.S., however, buoyed market sentiment in the region. The Nikkei 225 was up 1.0%, extending its eight-session winning streak.

Australia's S&P/ASX 200 gained 0.6%, as the domestic earnings season rolled on. Treasury Wine Estates Ltd (ASX:TWE) is down 0.7%, after the firm reported operating earnings of A$184.6 million, a figure at the bottom-end of its full year guidance that potentially takes pressure off private-equity firms bidding for the vintner to raise their 3.38-billion-Australian dollar (US$3.14 billion) offers.

Elsewhere, South Korea's KOSPI was down 0.7%. Hyundai Motor (KS:005380) was down 2.8% on concerns that a planned strike would disrupt production. A final decision on strike details is expected at a union meeting scheduled Thursday.

Overnight, U.S. stocks finished largely higher after the minutes from the Federal Reserve's July policy meeting suggested that the labor market is improving to the point that rate hikes may come sooner than later.

The Dow 30 rose 0.35%, the S&P 500 index rose 0.25%, while the NASDAQ Composite index fell 0.02%, mainly due to profit taking.

The U.S. labor market is improving to the point that rate hikes may come sooner rather than later, the Fed minutes released earlier revealed,

"Many participants noted that if convergence toward the Committee's objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated," the minutes released earlier Wednesday read.

"Indeed, some participants viewed the actual and expected progress toward the Committee's goals as sufficient to call for a relatively prompt move toward reducing policy accommodation to avoid overshooting the Committee's unemployment and inflation objectives over the medium term," the minutes added.

Stocks rose even though the document pointed to rising borrowing costs down the horizon.

The Federal Reserve's Jackson Hole symposium begins on Thursday, and many investors bet Fed Chair Janet Yellen will provide dovish words to complement the hawkish meeting minutes to convey to markets that even though rates will rise, monetary authorities will make sure they do so gradually.

Also on Thursday, the U.S. is to produce data on unemployment claims, manufacturing activity and existing home sales.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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