The Asian markets closed mixed on Thursday, with mainland markets rallying after another weak reading on Chinese manufacturing activity raised hopes for further stimulus measures by Beijing. Manufacturing activity in Asia’s top two economic powerhouses remained stuck in low gear in May, but an absence of inflation pressures suggested that authorities could inject yet more stimulus if needed. The lackluster performance in China and Japan, along with alarmingly weak export data from South Korea and Taiwan, put the burden of supporting global growth squarely on Europe and particularly the United States, which is struggling to get back on track after a fierce winter. China’s flash HSBC/Markit Purchasing Managers' Index (PMI) fell to 49.1 in May, below the 50-point level that separates growth in activity from a contraction on a monthly basis. Standard & Poor’s raised the outlook on Indonesia’s BB-plus sovereign rating to positive from stable, acknowledging the Southeast Asian nation’s improved policies aimed at better monetary and financial sector management. S&P is the only international agency which has Indonesia in the junk category. Fitch, at BBB-minus, and Moody’s, at Baa3, have rated it in the investment grade category.
Japanese Prime Minister Shinzo Abe’s plan to cut the country’s debt pile will rely on the Bank of Japan keeping government bond yields low for years to come, which could force the bank to maintain its massive monetary stimulus for longer than it wants. Abe has pledged to come up with plans to fix Japan’s tattered finances, but he is reluctant to raise taxes or cut spending drastically for fear of hurting the fragile economy. Japan’s All Industries Activity Index fell to a seasonally adjusted -1.3%, from 0.2% in the preceding month whose figure was revised up from 0.1%. The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 50.9 in May from a final 49.9 in April.
Asian Indices | Last Trade | Change in Points | Change in % |
Shanghai Composite | 4,529.42 | 83.13 | 1.87 |
Hang Seng | 27,523.72 | -61.33 | -0.22 |
Jakarta Composite | 5,313.21 | 20.46 | 0.39 |
KLSE Composite | 1,795.04 | -15.07 | -0.83 |
Nikkei 225 | 20,202.87 | 6.31 | 0.03 |
Straits Times | 3,439.86 | 0.18 | 0.01 |
KOSPI Composite | 2,122.81 | -16.73 | -0.78 |
Taiwan Weighted | 9,578.56 | -106.75 | -1.10 |
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