TOKYO, Sept 1 — Asian stocks and US index futures declined following the worst month for global equities in more than three years, with manufacturing data expected to reinforce concerns over the slowdown in China’s economy. The yen climbed with gold, while oil pulled back after entering a bull market.
Fresh from one of the most volatile trading periods since the global financial crisis, investors continue to monitor China, gyrations in its stock market and worries over growth underpinning last month’s selloff in risk assets. Private and government gauges of factory output in Asia’s largest economy are due Tuesday, while Australia — viewed as a bellwether for China given its commodity export links — will review interest rates.
“Relative to a week ago at least, when markets were effectively in meltdown mode, price action has settled down somewhat,” Philip Borkin, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a client note. “However, one certainly gets the impression that despite this relative calm, markets remain on tenterhooks.”
The MSCI Asia Pacific Index dropped a second day, losing 0.4 per cent by 9.28am. in Tokyo after sinking the most since May 2012 last month. Futures on the Standard & Poor’s 500 Index declined 1.1 per cent. While futures on equity gauges in Hong Kong and those on the FTSE China A50 Index rose at least 0.4 per cent in recent trading, indexes in Australia and South Korea opened down, losing at least 0.2 per cent. US oil retreated 3.7 per cent, while the yen appreciated 0.2 per cent and gold climbed for a third straight day.
The Chinese government’s purchasing managers’ indexes for both the manufacturing and non-factory sectors are due today, along with the private Caixin China manufacturing and services PMIs. Economists project that both factory gauges will indicate contraction. Manufacturing indexes for Japan to India, Europe and the U.S. are also scheduled, along with updates on consumer prices in Thailand and Indonesia.
Chinese stocks, which capped a third straight monthly decline on Monday, are unlikely to fluctuate wildly ahead of Thursday’s World War II anniversary parade in Beijing, according to Chris Weston, chief markets strategist in Melbourne at IG Ltd. “But how they go about achieving this is not immediately apparent.”
The Shanghai Composite Index fell 0.8 percent Monday, even as China’s securities regulator was said to have asked brokerages to step up their support for share prices by contributing 100 billion yuan (RM65 billion) to the nation’s market rescue fund and increasing stock buybacks.
Chinese equities will see “continued erosion” in mainland trading, Tom DeMark, the founder of DeMark Analytics who predicted the selloff there. — Bloomberg