Most of the Asian markets conclude Monday’s trade in green

Most of the Asian markets concluded Monday’s trade in green after manufacturing data on China signaled an improvement in the world’s second-largest economy. Hong Kong shares set for their best day in three weeks. Japan’s Nikkei average rose as real estate and construction stocks gained on hopes that Tokyo will win the race to host the 2020 Summer Olympics, while consumer finance shares climbed after a media report citing rising loan demand. The HSBC China Manufacturing Purchasing Managers’ Index, a gauge of nationwide manufacturing activity, rose to a final reading of 50.1 in August from 47.7 in July, HSBC Holdings PLC stated. The HSBC China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 420 manufacturing companies. This follows a rise in the official manufacturing PMI, a competing index, to 51.0 in August. China’s official manufacturing Purchasing Managers Index rose to 51.0 in August compared with 50.3 in July, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics. A PMI reading above 50 indicates an expansion in manufacturing activity from the previous month, whereas a reading below indicates contraction.

Indonesia’s annual inflation rate rose to 8.79% in August, the highest since January 2009, the statistics bureau stated. The core inflation which excludes volatile food prices and administered prices, climbed to 4.48% in August from 4.44% in July. In August, the inflation rate was pushed up by higher food and gold prices as well as imported inflation from the depreciating rupiah. Bank Indonesia has estimated that at year-end, inflation will be 9.0-9.8%. Besides, manufacturing activity contracted sharply in Indonesia in August and the workforce declined, according to HSBC Markit purchasing managers’ index (PMI), which fell to a 15-month low. Contraction in output, new orders and export orders pulled down the index for Southeast Asia’s biggest economy to 48.5 from 50.7 in July. This is the fourth straight month of deterioration in the PMI, and marks the lowest print since May 2012. Separately, Indonesia’s trade deficit widened sharply to $2.31 billion in July from $847 million in June due to rising imports, the Central Statistics Agency stated. The trade deficit is the highest on record since the government began including imports into free-trade zones in overall imports in 2008. The previous record deficit was $1.90 billion booked in October 2012.

South Korea’s manufacturing activity contracted for the third consecutive month in August, though at a slower pace than in July, indicating business conditions remain challenging amid an expected withdrawal of US monetary stimulus, data released by HSBC showed. The HSBC Purchasing Managers’ Index was at a seasonally adjusted 47.5 in August compared with 47.2 in July, reflecting a slightly less steep decline in output and new orders. Meanwhile, South Korea’s exports expanded at a faster pace in August than the previous month in a sign of economic recovery, the Ministry of Trade, Industry and Energy stated, beating market expectations. Exports in August gained 7.7% from a year earlier to $46.365 billion, following a 2.6% rise in July. Imports increased 0.8% on year to $41.449 billion in August, compared with a revised 3.2% gain in July.

The Hong Kong government’s expenditure for April-July amounted to $138.4 billion, with revenue of $111.3 billion, resulting in a deficit of $27.1 billion. The Financial Services & the Treasury Bureau stated that deficit was mainly because some major types of revenue, including salaries and profits taxes, were mostly received towards the end of a financial year. Fiscal reserves stood at $ 706.8 billion at the end of July.