Asia: Stocks mostly lower after worse-than-forecast China factory data
Asian stocks ended mostly in the red on Monday after disappointing China factory data fuelled worries about the country’s flagging economy.
The Shanghai index fell 2.66% while the Hang Seng rose 0.27% and the Nikkei dropped 1.63%.
Chinese industrial production rose 6.1% in August compared to a year ago, according to the National Bureau of Statistics. The figures fell short of analysts’ expectations for a 6.5% increase and followed the previous month’s 6% gain.
Another report from the statistics office in Beijing showed retail sales climbed 10.8% in August, more than the forecast for a 10.6% rise and a 10.5% jump a month ago.
“With investors still unsure about what is going on with respect to the Chinese economy after last week’s much weaker than expected inflation data, there is still an expectation that Chinese authorities will have to take further steps to ease monetary policy further in the coming weeks, and it is this, along with a weaker Chinese currency, that is fuelling concerns that we could see China export further deflationary price pressures into the global economy in the coming months,” said Michael Hewson, chief market analyst at CMC Markets.
China on Sunday outlined plans to restructure its state-owned enterprises, including partial privatisation. The proposal includes cleaning up and integrating some state firms, Xinhua news agency reported.
The guidelines were jointly issued by the Communist Party's Central Committee and the State Council, China's cabinet.
In Japan, industrial production fell more than initially estimated, according to the latest figures from the Ministry of Economy, Trade and Industry. Output dipped a seasonally-adjusted 0.8% month-on-month in July, revised from the 0.6% decrease initially reported. June’s production rose 1.1%.
On another downbeat note for Japan, the yen strengthened again the US dollar to hurt exporters.
Elsewhere in Asia, the Malaysian government announced it is spending 20bn ringgit on lifting shares and reducing taxes for manufacturers, which sent the Kuala Lumpur composite index up 0.6%. The move comes as Malaysia has seen the ringgit lose 20% of its value against the dollar this year and experience a 0.9% drop in its stock market.
Across the Atlantic the market is bracing for a possible interest rate hike by the Federal Reserve on Thursday. Some analysts see an increase by 25 basis points although others believe the recent market turbulence caused by China fears may delay such a move.
Company-wise, Toshiba declined as it swung to a first-quarter loss on weak PC and TV sales.
NTT Docomo led Japanese wireless carriers lower following a report that prime minister Shinzo Abe said mobile phone rates should be reduced.