As ForexMinute reported earlier, the Chinese manufacturing sector is not faring well and that is causing a lot of trouble for Asian and European economies, and is expected to have some impact on the U.S. as well. Amidst the concern about the Chinese exports, Asian stocks fell to a great extent.
A major issue that China is facing is that factory-gate prices extended the longest streak of declines since the Asian financial crisis. It looks even the measures taken by the government to inject 50 billion dollars does not seem to work.
On the other hand, the Federal Reserve minutes showed officials saw diminishing benefits from bond buying amidst the concern that it soon will taper the stimulus. On the dismal trading day, Great Wall Motor Co was the major loser. This is a mainland producer of sport-utility vehicles and pickups fell to a great extent as it saw a slump of 8.5 percent in Hong Kong.
Similarly, Belle International Holdings Ltd., China’s No. 1 seller of footwear, also received losses as its stocks fell 4.2 percent in Hong Kong. The company could not maintain the surge it got of 13 percent yesterday. This was not also a good trading day for Daiei Inc. which slumped 7.3 percent in Tokyo amidst the news that the company is cutting its operating-profit forecast.
Amidst the concern of the slowing manufacturing sector, major indexes in the region fell to a great extent. Whereas the MSCI Asia Pacific Index lost 0.7 percent to 138.90 as of 5:17 p.m. in Tokyo, Japan’s Topix (TPX) index fell 0.7 percent as earnings season began this week in Japan. On the dismal trading day the MSCI Asia Pacific Index maintained losses as data showed China’s inflation rate slowed last month.
On the other hand, South Korea’s Kospi index slipped 0.7 percent. The major reason behind the fall of the South Korean index was that the central bank left its key interest rate unchanged for an eighth straight month. However, it was a better trading day for Australia’s S&P/ASX 200 Index which added 0.2 percent.
Apart from Australia, another regional economic powerhouse New Zealand also saw a better trading day as its NZX 50 Index gained 0.7 percent. However, Singapore’s Straits Times Index was unable to keep the pace and lost 0.3 percent. A similar pattern was followed by Taiwan’s Taiex index which slid 0.5 percent today.
To contact the reporter of this story: Jonathan Millet at email@example.com