The so-called flash version of HSBC's Chinese manufacturing Purchasing Managers' Index hit an 11-month low at 47.7 in July, down from a final result of 48.2 for June. Any reading below 50 indicates contraction. Meanwhile, flash China Manufacturing Output Index at 48.2 in July (48.6 in June). The report also showed new export orders slowing, although at a slower rate than in the previous month.
Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co- Head of Asian Economic Research at HSBC said The lower reading of the July HSBC Flash China Manufacturing PMI suggests a continuous slowdown in manufacturing sectors thanks to weaker new orders and faster destocking.
However, regional market trimmed losses late afternoon after latest data showed Euro zone manufacturing unexpectedly expanded in July for the first time in two years, led by Germany, adding to signs the currency bloc's economy is emerging from a record-long recession. London-based Markit Economics said on Wednesday that flash Eurozone PMI Composite Output Index at 50.4 in July (48.7 in June),18-month high. Flash Eurozone Manufacturing PMI at 50.1 (48.8 in June), 24-month high. Flash Eurozone Services PMI Activity Index at 49.6 (48.3 in June), 18-month high. Flash Eurozone Manufacturing PMI Output Index at 52.3 (49.8 in June), 25-month high.
Euro zone manufacturers reported the largest monthly increase in output since June 2011, registering an expansion for the first time since February of last year. Service sector activity meanwhile fell only marginally, recording the smallest decline in the current 18-month sequence and showing signs of stabilizing after the marked rates of decline seen earlier in the year. New orders fell only marginally during the month, registering the smallest decline since August 2011. By country, output rose at the fastest rate for five months in Germany. Service sector growth hit a five-month high while manufacturers reported the steepest monthly increase in output since February of last year. Overall job creation hit the highest since March. In France, the rate of decline eased to the slowest seen since output began falling in March 2012. This was buoyed by a return to growth in manufacturing, which reported the largest rise in production for 17 months. The service sector meanwhile saw the smallest downturn in activity for 11 months. Employment fell across both sectors, though to the weakest extent since April 2012
Investors are now awaiting for key US data scheduled later in the global day to confirm about manufacturing growth in the world largest economy. US manufacturing activity in July will come into focus later Wednesday with the release of Markit's U.S. flash manufacturing PMI report. Also later Wednesday, the U.S. Commerce Department is expected to report a rise in sales of new homes.
Among the regional bourses, Japanese stock market closed lower due to profit taking among heavyweights amid concerns about market overheating, unexpectedly weak export data for June and weak Chinese manufacturing data, but losses were limited by rises in Apple-related stocks after the iPhone maker posted robust sales. The benchmark Nikkei 225 index fell 0.32% at 14,731.28, while the Topix index of all first-section shares was down 0.23% at 1,219.92.
The Ministry of Finance said on Wednesday that Japan's trade deficit was 180.8 billion yen ($1.8 billion) in June 2013, up from the 56.1 trillion yen deficit recorded in June 2012, largely due to higher costs for fuel imports. Japan registered a 996.4 billion trade deficit in May 2013. Exports rose by 7.4% YoY in June, while imports rose 11.8% in June from a year ago.
In Australia, shares in the Sydney market extended winning streak for third day in row, driven by strong performance from materials and resources and financials, but gains were limited due to weak Chinese manufacturing data. The All Ordinaries Index gained 0.3% to 5021.80 while the ASX 200 Index closed 0.4% up at 5035.10.
The Australian Bureau of Statistics said on Wednesday that Headline CPI rose 0.4% in the second quarter from the preceding three month, and were up 2.4% from the year-earlier period. The Reserve Bank of Australia targets inflation between 2% and 3%.
In New Zealand, NZ shares rose as demand for companies with a solid earnings track and growth prospects helped lift retirement village Operator Ryman Healthcare and medical and pet distributable firm Ebos to new records. The NZX 50 Index climbed 18.613 points, or 0.4 percent, to 4599.204. Within the index, 26 stocks rose, 17 fell and seven were unchanged. Turnover was $93 million.
Ebos rose 2.8 percent to a record NZ$10.45, bringing its 12-month gain to 56 percent. The stock is rated a 'buy' based on the consensus of two analysts polled by Reuters. Ryman, which has more than a decade of earnings growth under its belt, rose 1.4 percent to NZ $7.10. It has a 'hold' rating based on six analysts surveyed by Reuters and has climbed past its median price target of NZ $6.60.
In China, the Shanghai Composite index declined 0.52%, registering first fall in three sessions, as profit taking in banks and financials, materials, energy and industrials stocks on concern over growth outlook after HSBC data showed China's manufacturing activity has fallen to an 11-month low in July while the output index fell to a nine-month low.
Heavyweights of financials, realty, energy and were among the biggest decliners in Shanghai bourses. The Industrial and Commercial Bank of China, the nation's largest lender, shed 0.3% to 3.92 yuan. China Vanke, the nation's largest developer, lost 2.9% to 9.59 yuan. China Shenhua Energy Co, the nation's biggest coal producer, lost 1.9% to 15.91 yuan. Jiangxi Copper lost 4.4% to 15.76 yuan.
In Hong Kong, the city share market closed volatile session slight higher after recouping losses late afternoon, thanks to strong gains in financials and realty stocks which helped to offset loses elsewhere. The benchmark Hang Seng Index finished 0.24% higher at 21,968.93. The benchmark index had fallen as low as 0.53% early today. China Mobile dipped 1% to HK$83.05. HSBC nudged up 0.2% to HK$88.1. Elsewhere, AAC Tech added 3.2% to HK$35.55 on the back of Apple's strong results. Fountain Set soared 14% to HK$1.23 after the company issued positive profit alert.
In India, Indian stock market declined for the first time in six sessions today, dragged by lenders which fell on fresh measures by the Reserve Bank of India (RBI) to curb liquidity. The barometer index, BSE Sensex, provisionally closed 1.04% down at 20,090.68.
The RBI took new steps on Tuesday to support the rupee, including lowering the overall limit for borrowing under the daily liquidity adjustment facility (LAF) - which offers funds in exchange for collateral - for each bank to 0.5% of deposits from 1%
Elsewhere, Indonesia's JKSE Composite fell 1% and Taiwan's TAIEX lost 0.2%. South Korea's KOSPI rose 0.4%, Malaysia's KLSE Composite added 0.3% and Singapore's STI rose 0.7%.
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