Asia: heavy losses around region after China PMI data

Chinese stocks fell again on Friday, after a key manufacturing index deepened concerns over China’s growth.

The Shanghai Composite was down by 4.27%, just a touch above its July 8 low.

The smaller Shenzhen index fell by 5.39% and the start-up focused ChiNext index was lowered by 6.65%.

The stocks tumbled after a reading of Chinese manufacturing activity fell to its worst in more than six years.

CMC Markets said China’s low manufacturing PMI at 47.2 compounded with the domino effect of currency valuations and collapsing oil prices to keep investors on the fringes.

Rabobank said while the Chinese Yuan firmed slightly, the People’s Bank of China was not having its own way at all.

“One more down-leg like that and the state will have to buy another swathe of shares to try to push the index away from the “key” 3,500 level.”

Other Asian markets followed suit with Hong Kong’s Hang Seng also down, by 1.54%, while Taiwan’s Taiex was down by 3.66% at the close.

Japan’s Nikkei 225 index fell 2.98%, closing at a three month low. Losses in the power, insurance and banking sectors led shares lower. The yen was at ¥ 122.91 to the dollar.

Australia’s ASX 200 was down 1.34%, with insurer Medibank leading risers with a 13.43% gain.

Further south, New Zealand’s NZX50 rose in a volatile day where telco Spark led indexes higher by jumping by 9.4% to a four month high.