Asian shares edge down on weak China PMI

Survey showing China’s manufacturing activity at 15-month lows sends Asian shares tumbling

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Asian equities fell on Friday after a survey showed that China’s manufacturing activity contracted in July, investors became wary of trade as commodity prices continue to fall as the world's second largest economy struggles to pick up its fragile economy. ​

The MSCI Asia Index, minus Japan, ticked down 1 percent in early trade, heading towards an anticipated fall of more than 2 percent for the week. On the other hand, China's Shanghai Composite index ended down at 1.3 percent.

While, Asian markets ended weaker on Friday, European markets opened higher. Britain's FTSE100 rose close to 0.4 percent while Germany’s DAX increased to about 0.2 percent. 

There was very little change to spot gold, trading at $1,090.25 an ounce, in early Asian trade, keeping close to its lowest level since March 2010. 

Oil prices bounced back early Friday after trading weaker overnight. US crude was up about 0.7 percent at $48.78 a barrel while Brent rose 0.4 percent to $55.51, after hitting its lowest level on Thursday amid fears over a global supply glut. 

Although Japan showed improvement in a similar survey, its Nikkei stock index plunged to about 0.6 percent. The flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) showed a seasonally adjusted climb of 51.4 in July compared to a final 50.1 in June. 

This signals growth in Japan's economy even though economists suggest a fall in the second quarter. 

Meanwhile, the International Monetary Fund (IMF) warned Japan on Thursday that unless its government takes action on spending, its debt will exceed more than it can handle by 2030. 

"Japan's public debt is unsustainable under current policies," said the IMF in a report, adding that "a credible medium-term fiscal consolidation plan is needed ... [it] should aim to put debt on a downward path."

TRTWorld and agencies