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Asia stocks choppy as investors cautious after disappointing China data

Asian shares wobbled on Wednesday as investors remain cautious about China's path to reopening its economy after it released disappointing manufacturing data, with China and Hong Kong stocks wiping out strong gains from the previous day.

MSCI's gauge of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) was up 0.02% at 0201 GMT, paring earlier losses. At current levels, the index is set to post its biggest monthly gain since April 1999.

Hong Kong's Hang Seng Index HSI and China's benchmark CSI300 Index 399300, though, opened down 0.4% and 0.3% respectively, with China's factory activity contracting at a faster-than-expected pace in November.

The vaccination push was seen as crucial to unwinding nearly three years of strict curbs in the world's second-largest economy that have eroded economic growth, disrupted the lives of millions and sparked unprecedented protests this past weekend.

"Headlines from China regarding COVID restrictions and protests are causing jitters among investors. Although some COVID easing measures are being considered, it may not be enough to prevent further economic disruption," said Anderson Alves, global macro analyst at ActivTrades.

"Expectations are that as COVID cases continue to rise, restrictions will be re-tightened before year-end, bringing with it more uncertainty over the impact on the economy," he said in a research note on Wednesday.

Japan's Nikkei 225 NI225 fell 0.55% while Australia's S&P/ASX 200 XJO gained 0.29%.

Sentiments globally are of a cautious tone. The S&P 500 SPX closed lower on Tuesday as investors awaited guidance on the U.S. Federal Reserve's path of interest rate hikes.

Fed Chair Jerome Powell is scheduled to speak about the economy and labour market at a Brookings Institution event on Wednesday. A series of U.S. data concerning manufacturing, inflation and jobs will also be released this week.

"This week will offer an interesting test for markets as we have a look at the next important data macro data points out of the U.S., especially the PCE inflation data and the Friday November jobs report," said Redmond Wong, Greater China market strategist at Saxo Markets in Hong Kong.

The U.S. ISM manufacturing survey for the month on Thursday is also expected to slip into contraction, Wong said.

Oil prices continued to rise after a buoyant Tuesday, with U.S. crude CL1! up 0.873% to $78.87 a barrel and Brent BRN1! up 0.76% to $83.66 a barrel.

Spot gold GOLD rose 0.13%.

In currency markets the dollar index DXY declined 0.2%.

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