Asia report: Markets mixed as services growth slows in China
Stocks were in a mixed state as markets across Asia closed on Thursday, with the services sector in China showing slower growth in the latest data, while retail sales were on the up in Australia.
In Japan, the Nikkei 225 was up 0.39% at 29,058.11, as the yen weakened 0.21% against the dollar to last trade at JPY 109.79.
Fashion firm Fast Retailing tumbled 4.13%, while among the benchmark’s other major components, automation specialist Fanuc was up 1.52% and technology conglomerate SoftBank Group added 1.22%.
The broader Topix index advanced 0.84% by the end of trading in Tokyo, closing at 1,958.70.
On the mainland, the Shanghai Composite was down 0.36% at 3,584.21, and the smaller, technology-heavy Shenzhen Composite lost 0.34% to 2,392.64.
The unofficial Caixin/Markit services purchasing managers’ index came in at 55.1 for May, slowing from the 56.3 reading in April.
It was still above the 50-point mark that separates expansion from contraction, however.
“A drop was to be expected, despite the near-stability of the official gauge; metro, online sales, and housing sales figures all indicated a pull-back,” said Pantheon Macroeconomics chief Asia economist Freya Beamish.
“We aren’t concerned, though, with the index remaining at strong levels, and re-opening likely to pull it higher in the next few months.
“At the same time, the backlogs of work subindex rose above 50 again, to its highest level for over a year.”
Beamish said cost and price pressures built, in a reminder that the biggest threat to GDP growth in the second half was that capacity would not be able to come online quickly enough.
“The implied pace of increase in both costs and prices was the quickest since last year.
South Korea’s Kospi was ahead 0.72% at 3,247.43, while the Hang Seng Index in Hong Kong slid 1.13% to 28,966.03.
The blue-chip technology stocks were above the waterline in Seoul, with Samsung Electronics up 2.48% and SK Hynix rising 2.38%.
Oil prices were higher at the end of the Asian day, with Brent crude last up 0.11% at $71.43 per barrel, and West Texas Intermediate rising 0.07% to $68.88.
In Australia, the S&P/ASX 200 was up 0.59% at 7,260.10, as the country’s retail sales rose by a seasonally-adjusted 1.1% month-on-month in April, according to the Australian Bureau of Statistics.
The country’s main grocers were in the green, with Coles Group up 0.96% and Woolworths Group 1.47% firmer, while conglomerate Wesfarmers, which operates several discount and non-food retail brands, was 2.08% weaker.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.08% to 12,429.98, with New Zealand King Salmon plunging 5%.
The company warned investors earlier in the day that warmer weather had led to poor growth conditions in some of its farms, meaning fish were too small.
Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.26% at AUD 1.2935, and the Kiwi retreating 0.25% to NZD 1.3852.