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Hong Kong, China market slip; Caixin PMI dips

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SINGAPORE — Greater China stocks slipped while other Asia-Pacific indexes rose on Monday as a private survey on Chinese factory activity showed growth slowed in July.

Mainland China markets declined. The Shanghai Composite dipped 0.47% and the Shenzhen Component fell fractionally.

China’s Caixin/Markit manufacturing Purchasing Managers’ Index for July missed expectations, standing at 50.4, compared with the 51.5 predicted in a Reuters poll. In June, the reading was 51.7.

The contraction … underscores the extent of the uncertainty around growth stemming from a rise in Covid cases, slowing global demand and property market risks.

Venkateswaran Lavanya

Economist, Mizuho Bank

PMI readings are sequential and represent month-on-month expansion or contraction. The 50 mark separate growth from decline.

Over the weekend, China’s official Purchasing Managers’ Index data was released.

“The contraction in China’s official manufacturing PMI to 49.0 in July from 50.2 in June underscores the extent of the uncertainty around growth stemming from a rise in Covid cases, slowing global demand and property market risks,” Venkateswaran Lavanya, an economist at Mizuho Bank, wrote in a Monday note.

“The poor start to Q3 further amplifies the risk that China will miss its 2022 GDP growth target of ‘around 5.5%.’ This against a backdrop of the authorities signaling last week that no big stimulus would be forthcoming even as the country sticks to its ‘dynamic zero-Covid’ policy,” Lavanya wrote.

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Hong Kong’s Hang Seng index fell 0.72% as shares of tech giant Alibaba lost more than 4%.

On Friday in the US, Alibaba was added to a list of companies at risk of delisting under the Holding Foreign Companies Accountable Act. US-listed shares plunged 11% in the regular trading session.

HSBC is set to announce its interim earnings Monday.

Japan’s Nikkei 225 gained 0.28% and the Topix index advanced 0.49%.

In Australia, the S&P/ASX 200 inched up 0.34%.

The Kospi in South Korea climbed 0.24% and the Kosdaq gained 0.21%.

MSCI’s broadest index of Asia-Pacific shares outside of Japan lost 0.27%.

Currencies and oil

The US dollar index, which tracks the greenback against a basket of its peers, was at 105,667, lower than last week’s levels.

The Japanese yen traded at 132.27 per dollar, stronger than levels seen early last week. The Australian dollar was at $0.6983.

Oil futures slipped. US crude futures fell 1.27% to $97.37 per barrel, while Brent crude dropped 1.06% to $102.87 per barrel.

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