Asia Markets Off Badly, China PMI Weak
In an odd reversal of fortune, shares of stocks in what was the hyper-hot growth market of China have sold off sharply recently while the recession-plagued markets of the developed world are up. As U.S. markets reach multiyear lows, the Shanghai Composite and Hang Seng have moved toward recent lows. The worry that China will join the rest of the world in a slowdown is reflected in the direction of its markets.
The Shanghai Composite was down overnight to 2,025. That is a single-day drop of 2.1%. In one year, the market is down 20% against a 20% rise in the S&P 500. Joining the Shanghai Composite Hong Kong's Hang Seng was down to 20,597 - a drop of 1.1%. Some of the cause of this is likely to be disputes over islands with Japan, which have caused a great deal of geopolitical tension in the region. The Nikkei dropped 1.6% to 9,087. Yesterday, the Bank of Japan set new easing to help revive the slowing of the world's third largest economy by gross domestic product.
There was one other bit of bad news. The HSBC PMI numbers for China rose to 47.8 from 47.6 in August. A number below 50 signals contraction.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, China, International Markets