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Highlights
- The Hang Seng Index has crashed by over 1%
- APAC markets are tracking an unexpected shock contraction in China’s factory activity.
- Australian markets are the best performers in the region
Shares in the Asia Pacific region were mixed on Thursday as investors reacted to the release of Chinese factory activity data for September.
The brunt of the shock emancipating from China’s contracting output was borne by Hong Kong shares. As a result, the Hang Seng Index, on Thursday, crashed 1.22% in morning trade, while most other regional indices were trading in the green.
In mainland China, shares were rallying – with the Shanghai Composite up 0.50% and the Shenzhen Component up 1.15%.
China’s official manufacturing Purchasing Managers’ Index (PMI) for September came in at 49.6, below expectations for a reading of 50.1 by analysts. Any value of more than 50 denotes an expansion in the factory output, while a value below 50 denotes a contraction in factory output. PMI readings are sequential and represent month-on-month expansion or contraction.
The shock contraction of the factory output from China comes at a time when the country has been grappling with a massive power crisis, especially in the northeastern region. Adding to the woes is the Evergrande blow-up – a property developer which, if goes bust, will suck the liquidity out of entire Chinese financial system.
Shares of Evergrande, which is listed in Hong Kong, were trading 2% lower, after reports suggested that some bondholders did not receive a due coupon payment by the close of Asian business hours on Wednesday.
Elsewhere in Japan, the Nikkei 225 was down 0.40%, while the Topix was 0.42% down. The country is set to get a new prime minister after Fumio Kishida won the governing party leadership election on Wednesday.
Down Under in Australia, the benchmark ASX200 was up 1.35% amid broad-based buying support.
In South Korea, the KOSPI was up 0.14%.
