After the U.S. economy shrank and China reported higher manufacturing activity, Asian stock markets are neutral.
(AP) BEIJING — Thursday’s Asian stock markets were uneven after data showed that China’s factories were operating at a higher level and the U.S. economy shrank.
Tokyo and Seoul saw a dip, while Shanghai and Hong Kong saw growth. Oil costs increased.
Wednesday saw a 0.1% decline in the benchmark S&P 500 index on Wall Street as data revealed that the U.S. economy contracted in the first quarter due to high prices and declining consumer confidence.
Due to interest rate increases implemented to curb soaring inflation, investors are anxious about indications the largest global economy may be in a recession.
According to research by SPI Asset Management’s Stephen Innes, “Equities demand could stay subdued for at least the next four to six months as interest rate hikes work their way through the U.S. economy.”
After a monthly official barometer of industrial activity increased and new orders improved, the Shanghai Composite Index increased 1% to 3,394.39 points. Hong Kong’s Hang Seng increased by 0.1% to 22,025.14.
Tokyo’s Nikkei 225 index dropped 0.9% to 26,651.05 after June’s industrial production declined 7.2% from May. That represented the biggest drop since the coronavirus outbreak began in early 2020.
The S&P-ASX 200 in Sydney fell 0.8% to 6,644.00, while the Kospi in Seoul lost 0.7% to 2,361.93.
After official data revealed that economic activity decreased 1.6% annually in the three months ending in March, the S&P 500 fell to 3,818.83. Amid the epidemic, that was the first contraction since the second quarter of 2020.
The American benchmark has dropped 20% from its peak on January 3 and 7.6% for the month.
To 31,029.31, the Dow Jones Industrial Average increased by 0.3%. To 11,177.89, the Nasdaq composite fell less than 0.1%.
A recession is not only the most likely scenario, but according to Liz Ann Sonders, chief investment strategist at Charles Schwab, it may have already started.
At a European Central Bank meeting in Portugal on Wednesday, Federal Reserve Chair Jerome Powell said there is “no certainty” that inflation can be controlled without harming the labor market.
Both China’s anti-virus measures, which forced the closure of Shanghai and other industrial hubs, and Russia’s invasion of Ukraine, which increased the price of oil, wheat, and other commodities, have hurt the world economy.
Chinese statistics agency and an industry association announced a monthly purchasing managers’ index on Thursday, which increased to 50.2 in June from 49.6 in May on a scale of 100 points, with figures above 50 indicating rising activity. followed the reopening of industries, stores, and offices in Shanghai and other cities.
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