As Asian trading opened this morning, the markets were still reeling from Fridays disappointing jobs data released in the US and now hit harder by the release of further proof that China is suffering an economic slow down.
The non-manufacturing purchasing manager’s index (PMI) in the world’s second largest economy fell to 55.2 in May from 56.1 in April. The news comes just days after Beijing reported a sharp drop in activity in its manufacturing sector during the month. In the U.S. on Friday, the Bureau of Labor Statistics reported the economy added only 69,000 jobs, far less than the expected increase of 150,000. The numbers fueled concerns the global economy may be experiencing a more significant slowdown than at first expected and sparked talk of monetary policies being implemented in the US.
The trading week started with Hong Kong’s Hang Seng Index falling 2.23%, Australia’s S&P/ASX200 dropping 1.84% and Japan’s Nikkei 225 Index falling 2.05%. Japan’s broader Topix index shed lost 2.1% to 693.35 points, a 28 year-low. Many Asian stocks suffered big falls – In Hong Kong, top decliners included China Unicom, down 4.98%, HKEx, down 4.36%, and China Life, down 4.24%. Whilst in Australia, top decliners included art Energy, down 12.20%, Aquarius Platinum, down 10.58%, and Karoon Gas Australia, down 9.14%.
Today investors can expect European stocks to open lower. It is a national holiday in the UK and with a relatively quiet day on the economic data front there should be continued profit taking in the commodities markets as precious metals gain favour as a safe haven for traders.
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