Data shows contraction in Chinese manufacturing activity

SINGAPORE — Stocks in Asia-Pacific were mixed on the first trading day of the new quarter, as a private survey showed Chinese manufacturing activity contracted in March.

Chinese tech stocks in Hong Kong posted sizeable losses on Friday, with alibaba falling 2.14% and Baidu falling 4.45%. jd.com shed 2.14%. The Hang Seng Tech Index fell 0.74% to 4,524.25.

Hong Kong is wider Hang Seng Index recovered from earlier losses to close 0.19% higher at 22,039.55. Trading in a number of Hong Kong-listed companies, including Chinese real estate companies kaisa-group and Sunacwas suspended for missing the deadline for reporting annual results.

In mainland China, the Shanghai Composite rose 0.94% to close the day at 3,282.72 while the Shenzhen Component it rose 0.905% to 12,227.93.

The Caixin/Markit manufacturing purchasing managers’ index for March came in at 48.1, below the 50 level that separates growth from contraction. That compares with the previous month’s reading of 50.4. Friday’s reading was also the lowest since February 2020.

Data released on Thursday also showed Chinese factory activity slowed in March, with the official manufacturing PMI coming in at 49.5, down from February’s reading of 50.2.

The data comes as China battles its most severe outbreak of Covid-19 since the pandemic began.

“The PMI contraction was clearly due to the omicron bud. If you look at the high-frequency indicators, up until the omicron outbreak, they were actually improving and quite strong,” Dan Fineman, co-head of Asia-Pacific equity strategy at Credit Suisse, told “Street Signs Asia” on Friday. CNBC.

In other parts of Asia-Pacific, the Nikkei 225 in Japan it fell 0.56% to close at 27,665.98 while the Topix index fell 0.11% to 1,944.27.

Confidence in Japan’s big manufacturers soured in the three months to March, according to the Bank of Japan quarterly tankan business sentiment survey. The general index of confidence in large manufacturers came in at 14, down from the previous quarter’s reading of 17.

In South Korea, the Kospi it fell 0.65% on the day to 2,739.85. Australia S&P/ASX200 decreased fractionally, closing at 7,493.80.

Trading on the Colombo Stock Exchange in Sri Lanka ground to a halt for the day after the benchmark S&P SL20 index fell more than 10% from the previous close, hitting the circuit breaker threshold. That happens when Sri Lanka is in the middle of a financial and economic crisis.

MSCI’s broader index of Asia-Pacific shares outside of Japan fell 0.09%.

Overnight in the US, the S&P 500 fell about 1.57% to 4,530.41. The Dow Jones Industrial Average fell 550.46 points, or 1.56%, to 34,678.35. The Nasdaq Composite fell 1.54% to 14,220.52.

The losses on Wall Street came as the 2 years and US Treasury 10 years returns briefly invested for the first time since 2019, a move seen as a potential warning sign of the looming recession. The 2-year and 10-year spread was the last in negative territory before the pandemic lockdowns sent the global economy into a deep recession in early 2020.

The 2-year Treasury note yield last stood at 2.3976%, while the 10-year yield was 2.4244%.

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“It’s always a tricky business to assume that a yield curve inversion is … somehow a different signal this time than last,” Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, told ” Squawk Box Asia” from CNBC. ” on Friday.

“We take it seriously. We see some other indicators that are flashing red in the economy right now, like consumer confidence and future expectations,” Christopher said.

Still, he said a reversal would be more significant if it persisted for at least a month.

foreign exchange and oil

the us dollar indexwhich tracks the dollar against a basket of its peers, was at 98.5 after a recent bounce from levels below 98.

the japanese yen It was trading at 122.73 per dollar, stronger than the levels above 122 seen against the dollar yesterday. the Australian dollar it changed hands at $0.7503, versus levels around $0.747 seen yesterday.

Oil prices fell in the afternoon of the Asian trading day, with international reference Brent Crude Futures falling 0.4% to $104.29 a barrel. us crude oil futures it fell 0.66% to $99.62 a barrel.

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