Asia report: Most markets weaker, China manufacturing sector expands further

Most markets in Asia closed weaker on Monday, as investors kept watch of the ongoing Covid-19 pandemic, and digested the latest manufacturing data out of China.

In Japan, the Nikkei 225 was down 0.79% at 26,433.62, as the yen strengthened 0.07% against the dollar to last trade at JPY 104.02.

Automation specialist Fanuc was down 1.67%, while among the benchmark’s other major components, fashion firm Fast Retailing rose 2.15% and technology conglomerate SoftBank Group eked out gains of 0.3%.

The broader Topix index was 1.77% weaker by the end of trading in Tokyo, closing at 1,754.92.

Fresh data showed Japan’s retail sales rose 6.4% year-on-year in October, sating market expectations.

On the mainland, the Shanghai Composite was off 0.49% at 3,391.76, and the smaller, technology-heavy Shenzhen Composite slipped 0.15% to 2,249.66.

According to the National Bureau of Statistics, China’s official manufacturing purchasing managers’ index (PMI) for November came in at 52.1.

That was above expectations for a reading of 51.5 according to a poll by Reuters, and marked the ninth straight month the measure was above the 50-point mark that separates expansion from contraction.

“China’s economy has continued to rebound from its own lockdown earlier this year, with the latest manufacturing PMI hitting its highest level since September 2017 at 52.1,” said CMC Markets chief market analyst Michael Hewson.

“The services sector also outperformed, surpassing its October reading of 56.2 with a rise to 56.4, its highest reading since June 2012, as Chinese households continuing to loosen the purse strings after a cautious summer, due to concerns about a second wave, that has so far failed to materialise.”

South Korea’s Kospi slid 1.6% to 2,591.32, while the Hang Seng Index in Hong Kong was 2.06% lower at 26,341.49.

Chinese oil and gas company CNOOC plunged 13.97% in the special administrative region, and chipmaker SMIC lost 2.7%, amid reports outgoing US president Donald Trump was set to add both firms to a defence blacklist.

The blue-chip technology stocks were both weaker in Seoul, with Samsung Electronics down 2.2% and SK Hynix losing 1.32%.

Oil prices were lower at the end of the Asian day, with Brent crude last down 1.83% at $47.30 per barrel, and West Texas Intermediate falling 1.65% to $44.78.

In Australia, the S&P/ASX 200 was down 1.26% at 6,517.80, with Treasury Wine Estates falling 6.93%.

The company said it would reallocate some of its wine intended for China, following the imposition of tariffs on wine from Australia by authorities in Beijing.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was the region’s odd one out, managing gains of 1.02% to 12,768.52, as medical device maker Fisher & Paykel Healthcare rocketed 5.8%.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.08% weaker at AUD 1.3548, while the Kiwi strengthened 0.16% to NZD 1.4201.