Asia-Pacific markets traded slightly higher on Monday, kicking off a data-packed week with investors closely watching economic indicators from China, Japan, South Korea, and other regional economies.
Fresh manufacturing and retail figures, coupled with updates on trade and inflation, are expected to provide insights into the region’s economic recovery amid global uncertainties.
China’s PMI signals growth
China’s official manufacturing purchasing managers’ index (PMI) for November rose to 50.3, its highest since April and above economists’ expectations of 50.2, according to a Reuters poll.
This marked an improvement from October’s reading of 50.1.
However, the non-manufacturing PMI dipped slightly to 50.0 from 50.2, indicating stagnation in the service sector.
The composite PMI held steady at 50.8, signaling moderate expansion.
Meanwhile, the Caixin/S&P Global manufacturing PMI, which focuses on smaller manufacturers, showed further growth with a reading of 51.5, exceeding the forecast of 50.5.
These figures highlight the impact of China’s recent stimulus measures in bolstering industrial activity, even as challenges remain in other sectors, including real estate and consumer spending.
Asia-Pacific market indices
Elsewhere, Australia reported a robust 3.4% year-on-year rise in retail sales for October, the fastest pace since May 2023.
Monthly, sales grew by 0.6%, beating the forecasted 0.4% increase.
The data reflects strong consumer confidence despite global economic uncertainties.
In South Korea, the Kospi index traded near the flatline, while the small-cap Kosdaq rose 0.13%.
Preliminary trade data showed exports grew by 1.4% year-on-year in November, falling short of expectations for 2.8% growth and marking a sharp decline from October’s 4.6% increase.
The data suggests a slowdown in the country’s export-driven economy.
Japan’s Nikkei 225 and the broader Topix index posted modest gains, with the Topix rising 0.68%.
Investors in Japan are looking forward to updates on domestic economic policies and external trade developments.
Hong Kong’s Hang Seng index rose 0.21%, while mainland China’s CSI 300 gained 0.26%.
The Hang Seng Mainland Properties Index advanced 0.5%, supported by accelerating growth in China’s new home prices in November, offering some respite to the struggling property sector.
US markets close on a high note
On Friday, US markets ended a shortened trading session on a strong note.
The S&P 500 and Dow Jones Industrial Average recorded their best monthly performances of 2024.
The Dow rose by 0.42%, while the S&P 500 and Nasdaq Composite gained 0.56% and 0.83%, respectively.
A surge in semiconductor stocks contributed to the rally after reports suggested that potential restrictions on semiconductor equipment sales to China might be less stringent than initially feared.
Notable gains included Lam Research, up over 3%, and Nvidia, which rose more than 2%.
GQG Partners stock tumbles after UBS downgrade
Shares of Australian-listed investment firm GQG Partners, a significant investor in India’s Adani Group, plunged by over 15% on Monday.
The drop came after UBS downgraded the stock from “buy” to “neutral” and slashed its target price from AU$3.30 to AU$2.30.
This marks UBS’s first-ever downgrade of GQG since it began coverage in 2022. The stock was trading at AU$2.08 as of the afternoon in Sydney.
GQG is the fourth-largest investor in Adani Enterprises, and the downgrade reflects growing caution over the firm’s investment portfolio amidst heightened scrutiny of Adani Group’s financial practices.
Investors are bracing for more economic data as the week unfolds.
Indonesia is set to release its November inflation numbers, providing insights into price stability in Southeast Asia’s largest economy.
Additionally, PMI readings from various Asian economies will offer a clearer picture of manufacturing activity across the region.
As global markets grapple with uncertainties ranging from inflation to geopolitical tensions, Asia-Pacific remains a focal point for investors seeking signs of economic resilience and growth opportunities.
By closely tracking economic indicators and market trends, analysts hope to gauge the region’s recovery trajectory and the potential implications for global trade and investment.
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