A worker works on the production line at Jingjin filter press factory in Dezhou, Shandong province, China, August 25, 2022. REUTERS/Siyi Liu/File Photo Acquire License Rights
1 September (Reuters) – A look at the day ahead in Asian markets by financial markets journalist Stephen Culp.
Asian stocks could start September with a choppy session on Friday as key US economic data showed monthly inflation slowing, a second reading of China’s manufacturing PMI is expected to show modest improvement and the US employment report is on the up is.
As investors welcome a fresh new month, any hint that central bank governors are nearing the end of a tightening cycle and thus averting a possible global economic slowdown should increase appetite risk.
On the back of bad data that showed China’s factory activity in contraction territory for the fifth straight month, the Caixin Manufacturing Purchasing Managers’ Index came as an upside surprise, which is expected to improve slightly to 49.3, less than a point below the dividing line between contraction and expansion – could lure buyers back into Chinese equity markets.
Concerns over sluggish demand in China have weighed on investor sentiment of late, with the blue-chip CSI 300 index posting its largest monthly percentage decline in August since last October and the Shanghai SE Composite (.SSEC) posting its sharpest percentage decline since September suffered 2022.
China’s real estate woes are mounting and Country Garden, the country’s largest private real estate developer, is warning of a risk of default after posting a $6.7 billion net loss in the first half.
But September could offer a fresh start.
Recent policy decisions and other moves by Beijing and Chinese companies to boost investor sentiment and support local markets have had an impact. Chinese stocks posted consecutive gains of 1% or more this week for the first time since January.
Asian stock index performance
Here are key developments that could give markets more direction on Friday:
– South Korea – Import/Export Growth PMI (August)
– China – Caixin Manufacturing PMI (August)
– Australia – Home Equity (July)
Reporting by Stephen Culp; Edited by Josie Kao
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