 "Asia stocks hobbled by growth anxiety, China PMI fails to impress")
Asian shares sagged on Thursday after a retreat on Wall Street and falling crude oil prices rekindled investor anxiety over slowing global growth, while a mixed picture on Chinese manufacturing failed to impress markets.
Japan’s Nikkei share average fell 0.4 per cent while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.3 per cent.
European shares look set to slide, with spreadbetters expecting France’s CAC 40 to fall as much as 0.8 per cent, Germany’s DAX 0.7 per cent and Britain’s 0.6 per cent.
The latest manufacturing read on China did little to allay those concerns.
The flash HSBC/Markit manufacturing purchasing managers’ index (PMI) edged up to 50.4 from a final reading of 50.2 in September, just a hair’s breadth from the 50.3 reading forecast by analysts.
But the level of output in factories fell to a five-month low of 50.7, just above the 50-point level that separates growth from contraction on a monthly basis, pointing to a still-shaky economy.
“While the manufacturing sector likely stabilised in October, the economy continues to show signs of insufficient effective demand,” said Hongbin Qu, chief economist for China at HSBC.
Falling oil prices also lent an air of caution and underscored worries over the health of the global economy.
“I think it will take some time before markets calm down. Market sentiment is still fragile. The market has realised that the US economy cannot be decoupled from sluggishness in the rest of the world,” said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
“But on the other hand, I think the market is now going to the other extreme in betting on recoupling of the US and the rest of the world,” he added.
Wall Street shares slid on Wednesday after big gains in the past few days, with S&P 500 Index falling 0.7 per cent.
Energy companies were hit by a fall in oil prices while earning results from companies such as Boeing and Biogen Idec failed to meet investors’ lofty expectations.
In addition, a shooting incident at the Canadian parliament in Ottawa unnerved investors.
Oil prices flirted near multi-year lows hit last week, after data showed a second consecutive weekly jump in US crude stockpiles.
The US Energy Information Administration said crude stocks rose by 7.11 million barrels, more than double the 2.7 million barrel increase analysts had expected.
US crude futures last traded at $80.50 per barrel, after a 2.8 per cent fall on Wednesday to trade near two-year low of $79.78 hit last week. Brent crude slipped to $84.65, not far off a four-year low of $82.60 plumbed a week ago.
In the United States, a mild rebound in US consumer prices in September reduced some bets the Fed might postpone possible plans to raise rates in 2015, keeping US Treasuries in check.
The 10-year US Treasuries yielded 2.208 per cent, having risen as high as 2.250 per cent on Wednesday.
The data also helped to lift the US dollar against other currencies. The euro dipped to $1.2674, near its lowest level in more than a week, having slipped from $1.28875 marked on Wednesday last week.
Japan’s Nikkei share average fell 0.4 per cent while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.3 per cent.
European shares look set to slide, with spreadbetters expecting France’s CAC 40 to fall as much as 0.8 per cent, Germany’s DAX 0.7 per cent and Britain’s 0.6 per cent.
More From This Section
Turbulence has gripped global markets in recent weeks on anxiety about slowing world growth. In particular, investors have been rattled by the threat of recession in Europe and the Chinese economy cooling to its weakest in over five years in the third quarter.
The latest manufacturing read on China did little to allay those concerns.
The flash HSBC/Markit manufacturing purchasing managers’ index (PMI) edged up to 50.4 from a final reading of 50.2 in September, just a hair’s breadth from the 50.3 reading forecast by analysts.
But the level of output in factories fell to a five-month low of 50.7, just above the 50-point level that separates growth from contraction on a monthly basis, pointing to a still-shaky economy.
“While the manufacturing sector likely stabilised in October, the economy continues to show signs of insufficient effective demand,” said Hongbin Qu, chief economist for China at HSBC.
Falling oil prices also lent an air of caution and underscored worries over the health of the global economy.
“I think it will take some time before markets calm down. Market sentiment is still fragile. The market has realised that the US economy cannot be decoupled from sluggishness in the rest of the world,” said Tsuyoshi Shimizu, chief strategist at Mizuho Asset Management.
“But on the other hand, I think the market is now going to the other extreme in betting on recoupling of the US and the rest of the world,” he added.
Wall Street shares slid on Wednesday after big gains in the past few days, with S&P 500 Index falling 0.7 per cent.
Energy companies were hit by a fall in oil prices while earning results from companies such as Boeing and Biogen Idec failed to meet investors’ lofty expectations.
In addition, a shooting incident at the Canadian parliament in Ottawa unnerved investors.
Oil prices flirted near multi-year lows hit last week, after data showed a second consecutive weekly jump in US crude stockpiles.
The US Energy Information Administration said crude stocks rose by 7.11 million barrels, more than double the 2.7 million barrel increase analysts had expected.
US crude futures last traded at $80.50 per barrel, after a 2.8 per cent fall on Wednesday to trade near two-year low of $79.78 hit last week. Brent crude slipped to $84.65, not far off a four-year low of $82.60 plumbed a week ago.
In the United States, a mild rebound in US consumer prices in September reduced some bets the Fed might postpone possible plans to raise rates in 2015, keeping US Treasuries in check.
The 10-year US Treasuries yielded 2.208 per cent, having risen as high as 2.250 per cent on Wednesday.
The data also helped to lift the US dollar against other currencies. The euro dipped to $1.2674, near its lowest level in more than a week, having slipped from $1.28875 marked on Wednesday last week.