Asia: Chinese market down as IMF delays addition of yuan to its currency basket
Asian equities markets painted a mixed picture on Wednesday, following overnight losses.
Fast Retailing Co.
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Nikkei 225
39,504.53
09:45 04/10/24
Santos Limited
$7.30
08:31 04/10/24
Woodside Petroleum Limited
$26.64
08:31 04/10/24
Japan's Nikkei 225 gained 0.46% despite the release of data which showed overall expansion is slowing.
Japanese services purchasing managers’ index (PMI) declined to 51.2 in July from 51.8 one month earlier. Meanwhile, PMI composite was flat at 51.5 points.
The rise in stocks was driven by stronger earnings in construction firms and real estate developers. Concurrently, a dollar was fetching JPY124.37 as the session's trade neared the closing bell.
In the corporate world, Fast Retailing lost 4.72% after announcing its Uniqlo brand saw its store sales fall in July by 1.5% year-on-year.
However, the Shanghai composite index fell 1.64% despite positive figures from its services sector, hurt by the International Monetary Fund's decision to delay the addition of the yuan to its benchmark currency basket until after September 2016.
The Caixin PMI on Chinese services rose to 53.8 in July from 51.8 the previous month. A reading above 50 indicates expansion while a level below that signals contraction.
Meanwhile, the IMF said it would hold off any move to add the yuan to its benchmark currency basket until after September next year. It would now wait until China had made a push to add the yuan to the IMF’s Special Drawing Rights basket as a way of reducing its dependence on the dollar.
Elsewhere, Hong Kong's Hang Seng index increased 0.40% after opening lower. Chinese authorities announced on Tuesday they will step up a crackdown on short-selling of shares.
New rules will make it harder for speculators to profit from hourly changes in stock prices and will mean short-sellers must wait at least one day to cover their positions and pay back loans used to buy shares.
Meanwhile, Australia's ASX index fell 0.40% hurt by energy stocks. Woodside Petroleum fell 0.4% and Santos lost 0.98%.
On a brighter note, the country's services PMI published by AiG rose to 54.1 points in July, from 51.2 a month before.