Asia report: Markets mixed as China manufacturing growth slows

Markets in Asia closed in a mixed state on Wednesday, as oil prices continued to rise, with China-based pharmaceuticals firm Hutchmed debuting on the Hong Kong bourse.

In Japan, the Nikkei 225 was down 0.07% at 28,791.53, as the yen strengthened 0.02% against the dollar to last trade at JPY 110.51.

Fashion firm Fast Retailing lost 0.06%, while among the benchmark’s other major components, automation specialist Fanuc was up 0.08% and technology conglomerate SoftBank Group rose 0.26%.

The broader Topix index was 0.3% weaker by the end of trading in Tokyo, closing at 1,943.57.

On the mainland, the Shanghai Composite was ahead 0.54% at 3,591.20, and the smaller, technology-heavy Shenzhen Composite jumped 1.02% at 2,466.24.

Fresh data out of China showed a slowdown in manufacturing growth in June, with the official purchasing managers’ index coming in at 50.9 for the month.

That was down from the 51 reading in May, but was still above the 50-point level above which marks expansion.

Pantheon Macroeconomics chief Asia economist Freya Beamish said that while the reading was “trivially” above consensus, there was much to be picked through in the details.

“The output subindex fell to 51.9, from 52.7, but the domestic and foreign new orders subindices were closer to stable, suggesting that the output softening is temporary,” she said.

“Backlogs also were cleared at a slower pace. In contrast, the stock of finished goods subindex rose to levels that we associated with re-stocking, even though it remains well below 50.

“That points to a curb on goods price rises, but the lag is long.”

Freya Beamish said that as expected, the price subindices fell to levels consistent with a rise in the producer price index of about 0.6% month-on-month in June, slowing substantially from the 1.6% increase in May.

“Commodity prices have been choppier in the past few months, and that is still feeding through; we think price rises will pick up again next month.

“For now, these data suggest a more modest rise in PPI inflation in June, to 9.3%, from May’s 9.0%.”

South Korea’s Kospi managed gains of 0.3% to 3,296.68, while the Hang Seng Index in Hong Kong was off 0.57% at 28,827.95.

The China-based, AIM-traded pharmaceutical maker Hutchmed debuted on the stock exchange in the special administrative region, trading over 60% higher than its offer price.

Seoul’s blue-chip technology stocks were in a mixed state, with Samsung Electronics down 0.37%, while SK Hynix jumped 2%.

Oil prices continued to rise at the end of the Asian day, with Brent crude last up 0.63% at $75.23, and West Texas Intermediate advancing 1.06% to $73.75.

In Australia, the S&P/ASX 200 was 0.16% firmer at 7,323.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 eked out gains of 0.12% to 12,654.60.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.14% at AUD 1.3331, and the Kiwi retreating 0.16% to NZD 1.4323.