Asian stocks skid after weak China factory readings
BEIJING (AP) — Asian stock markets tumbled Wednesday as 2019 trading began, after surveys showed Chinese manufacturing weakening.
KEEPING SCORE: The Shanghai Composite Index lost 1.1 percent to 2,465.29 and Hong Kong’s Hang Seng fell 2.6 percent to 25,161.03. Japan’s markets were closed. Seoul’s Kospi lost 1.3 percent to 2,013.80 and Sydney’s S&P-ASX 200 shed 0.9 percent to 5,593.80. Manila advanced while Singapore and Jakarta retreated. New Zealand was closed.
CHINESE FACTORIES: Surveys by China’s government and a major business magazine showed activity weakened in December as global and domestic demand cooled. Forecasters said that could send shockwaves through Asian economies that supply Chinese factories with raw materials and components. Chinese export growth has held up as producers rushed to fill orders before possible new U.S. tariff hikes in Washington’s trade battle with Beijing, but forecasters said that effect may be fading.
ANALYST’S COMMENT: The Chinese manufacturing downturn “raises a few red flags,” said Vishnu Varathan of Mizuho Bank in a report. The slide is “not entirely surprising given more challenging global trade conditions,” but it is “potentially symptomatic of far sharper underlying demand pullback,” said Varathan. China’s trade and investment ties with its neighbors mean the slowdown “will reverberate more widely to other Asian exporters.”
CURRENCY: The dollar edged down to 109.36 yen from Monday’s 109.67. The euro declined to $1.1446 from $1.1466.
ENERGY: Benchmark U.S. crude lost 41 cents to $45.00 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 8 cents on Monday to close at $45.41. Brent crude, used to price international oils, slumped 53 cents to $53.27 per barrel in London. It added 59 cents the previous session to close at $53.80.