Asian Stocks Wilt As Investors Mull Global Manufacturing Weakness
Asia Pacific Stocks Talking Points:
- Equity markets were broadly weaker, although some were well off their lows
- US manufacturing weakness added to gloom from Europe
- The US Dollar overcame initial pressure but didn’t rise far
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Asia Pacific markets failed to thrive in a Wednesday session condemned to follow Wall Street weakness. That came in turn on renewed worries about the strength of the US and broader global economies.
The Institute for Supply Management said that US manufacturing activity contracted to its worst level since June 2009 last month, and this report came after similar weakness in the same sector across Europe.
Markets in India and mainland China were closed for holidays and those markets which were open were a sea of red as afternoon trade got under way. Australia’s ASX 200 was down more than 1% with weakness seen across all sectors. National Australia Bank was a notable faller after announcing that it would have to take charges of more than A$1.18 billion (US$792) which would mean a sizeable earnings hit.
Gold miners did unsurprisingly well with haven assets more in demand. Mayne Pharma Group was the standout gainer having signed an exclusive supply and license agreement with Mithra Pharmaceuticals for the Estetrol and drospirenone drugs.
The Nikkei 225 was down 0.5% with growth bellwethers Softbank and Fanuc both lower. Hong Kong saw a violent day of protests Monday when the market was closed for a holiday, but Hang Seng falls have been comparable to those of regional markets now trade has restarted. It was down 0.3% as afternoon trade got under way, well above its session low.
Those weak manufacturing numbers initially weighed on the US Dollar as a new calendar quarter got under way (the greenback had generally risen through the quarter before), but the US currency didn’t slip a lot further in an Asian trading day short of heavyweight economic news.
The British Pound had made gains through September as markets judged the chance of a ‘no deal’ exit for the UK from the European Union to have receded. However now they’re far from as sure and GBP/USD is closing back in on one-month lows.
There’s a similar paucity of scheduled economic news coming up in the European and Asian sessions, but crude oil markets, at least will focus on US inventory data from the Department of Energy.
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--- Written by David Cottle, DailyFX Research
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