Asian Shares Mixed After China Data

Asian stocks ended mixed on Tuesday as concerns about rising coronavirus cases and geopolitical tensions offset data showing that China’s manufacturing sector continued to expand in August.

Chinese shares eked out modest gains after a private survey showed the country’s factory activity expanded at the fastest clip in nearly a decade in August.

The benchmark Shanghai Composite index edged up 14.93 points, or 0.44 percent, to 3,410.61, while Hong Kong’s Hang Seng index ended marginally higher at 25,184.85.

The Caixin/Markit Manufacturing Purchasing Managers’ Index rose to 53.1 from 52.8 in July amid the sharpest increase in output and new orders since 2011. New export work rose for the first time this year, while employment moved closer to stabilization.

Japanese shares ended on a flat note even as trading companies extended gains after Warren Buffett’s Berkshire Hathaway disclosed stakes of “slightly more” than five percent in each of the country’s five biggest trading houses.

The Nikkei average edged down 1.69 points to 23,138.07, while the broader Topix index closed 0.15 percent lower at 1,615.81. Itochu Corp, Marubeni, Sumitomo Corp, Mitsui & Co and Mitsubishi Corp gained 1-3 percent.

The manufacturing sector in Japan continued to contract in August, albeit at a slower pace, the latest survey from Jibun bank revealed today with a manufacturing PMI score of 47.2, up from 45.2 in July.

The unemployment rate in Japan came in at a seasonally adjusted 2.9 percent in July. That was beneath expectations for 3.0 percent, although it was up from 2.8 percent in June. The number of employed persons in July was 66.55 million, a decrease of 760,000 from the previous year.

Australian markets fell for a third straight session after regulators in China placed another hurdle in front of Australian winemakers.

The benchmark S&P/ASX 200 index hit a four-week low before ending the session down 107.10 points, or 1.77 percent, at 5,953.40, dragged down by financials and miners.

The broader All Ordinaries index ended down 102.70 points, or 1.64 percent, at 6,143.20.

The big four banks fell 2-3 percent as the Reserve Bank of Australia maintained its key interest rate at a record low and quantitative easing unchanged but increased the size of the Term Funding Facility.

QBE Insurance lost 6.3 percent after its Group CEO Pat Regan stepped down from the company following an investigation into workplace communications.

Top iron ore miners BHP Group and Rio Tinto shed 1.1 percent and half a percent, respectively amid increasing tensions between Canberra and Beijing. Gold miners Evolution and Norther Star Resources rose as gold prices held near their highest level in nearly two weeks.

Origin Energy, Santos and Woodside Petroleum gave up 2-3 percent after crude oil prices dipped overnight.

In economic releases, the recovery in the Australian manufacturing sector was sustained in August but the pace of growth slowed owing partially to the lockdown measures re-imposed in Victoria, survey data from IHS Markit and Commonwealth Bank showed.

Australia posted a current account surplus of A$17.738 billion in the second quarter of 2020, a government report showed – beating forecasts for a surplus of A$13.0 billion. The total number of building permits issued in Australia came in at a seasonally adjusted 12.0 percent on month in July.

Seoul stocks posted strong gains after the government proposed an 8.5 percent national budget increase for next year to pull Asia’s fourth-largest economy from the pandemic-induced slowdown. The benchmark Kospi climbed 23.38 points, or 1.01 percent, to 2,349.55 after declining over 1 percent in the previous session.

Investors shrugged off surging new infections, with the country’s Covid-19 tally surpassing 20,000 today.

On the data front, South Korea’s GDP declined a seasonally adjusted 3.2 percent on quarter in the second quarter of 2020, the Bank of Korea said. That follows the 1.3 percent contraction in the first quarter, putting the country firmly into a recession. On a yearly basis, GDP fell 2.7 percent.

The country’s merchandise trade surplus came in at $4.12 billion in August, matching expectations. The manufacturing sector in South Korea continued to contract in August, albeit at a slower pace, the latest survey from IHS Markit revealed.

New Zealand shares fell sharply as trading continued under a new arrangement following almost a week of daily attacks on the stock exchange. The benchmark NZX-50 index fell 144.40 points, or 1.21 percent, to 11,793.16, dragged down by financials and healthcare stocks.

In economic news, the total number of new building consents issued in New Zealand tumbled a seasonally adjusted 4.5 percent on month in July, Statistics New Zealand said in a report.

U.S. stocks ended mixed overnight as investors fretted about U.S.-China tensions and data showed a surge in new coronavirus cases in several states across America.
Meanwhile, Federal Reserve Vice Chairman Richard Clarida said that rates will not be hiked just because the jobless rate is coming down.

The tech-heavy Nasdaq Composite rose 0.7 percent to reach record closing high, while the Dow Jones Industrial Average shed 0.8 percent and the S&P 500 slid 0.2 percent.

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