Asia stocks mixed after Wall Street down, China manufacturing up

BEIJING –

Thursday’s mixed Asian stock market results were due to the U.S. economic contraction and China reporting stronger factory activity.

Shanghai and Hong Kong benefited, while Tokyo and Seoul suffered. Oil prices advanced.

Wall Street’s benchmark S&P 500 index edged down 0.1% on Wednesday after data showed the U.S. economy shrank in the first quarter amid high inflation and weakening consumer confidence.

Investors are concerned about signs that the largest global economy could be in recession because of interest rate increases imposed to reduce inflation.

“Equities demand could remain muted for at least the next four to six months as interest rate hikes work through the U.S. economy,” saidStephen Innes from SPI Asset Management in an article.

After an official monthly gauge indicating factory activity rising and new orders improving, the Shanghai Composite Index rose 1.1% to 3,394.39 The Hang Seng in Hong Kong increased 0.1% to 22,025.14.

The Nikkei225 in Tokyo fell 0.9%, to 26,651.05, after June industrial production dropped 7.2% compared to the previous month. This was the largest decline since the outbreak of the coronavirus pandemic early 2020.

The Kospi in Seoul shed 0.7% to 2,361.93 and Sydney’s S&P-ASX 200 declined 0.8% to 6,644.00.

The S&P 500 slipped to 3,818.83 after official data showed economic activity contracted 1.6% at an annualized rate in the three months ending in March. It was the first contraction since February 2020, when the pandemic was at its worst.

The U.S. benchmark is down 7.6% in the month and 20% since its Jan.3 peak.

The Dow Jones Industrial Average climbed 0.3% to 31,029.31. The Nasdaq composite fell less than 0.1%, to 11,177.89.

“Not only is recession the base case, but I think it already may have begun,” saidCharles Schwab’s chief investment strategist Liz Ann Sonders

Jerome Powell, Federal Reserve Chair, speaks at a European Central Bank meeting, Portugal. said Wednesday there is “no guarantee” inflation can be tamed without hurting the job market.

Global economic turmoil has been caused by anti-virus measures taken in China, which shut down Shanghai and other industrial centers, and Russia’s invasion Ukraine, which have pushed up the prices of oil, wheat, and other commodities.

The Chinese statistics agency released Thursday’s monthly purchasing manager’s index. This rose from 49.6 in June to 50.2 on a 100 point scale, where numbers above 50 indicate an increase in activity. After factories, shops, and offices in Shanghai and elsewhere were allowed to reopen, the index was released.

Energy markets saw benchmark U.S. crude rise 35 cents, to US$110.13 a bar in electronic trading at the New York Mercantile Exchange. The contract fell $1.98 to $109.78 on Wednesday. Brent crude, the price base for international oil trading, rose 50 cents, to $112.95 per barrel in London. It fell $1.72 to $116.26 in the previous session. per barrel.

The dollar rose to 136.62 Japanese yen, up from Wednesday’s 136.54. The euro fell from $1.0523 to $1.0442.