China PMI Data, Stocks, Currencies, Oil

SINGAPORE – Chinese markets rose Thursday as government data showed manufacturing activity grew in June but most other Asia-Pacific indices fell.

Mainland China markets closed higher. The Shanghai Composite rose 0.37% and the Shenzhen Component gained 1%.

The Hang Seng index in Hong Kong rose 0.13%.

Japan’s Nikkei 225 fell 0.72%, while the Topix fell 0.54%

In Australia, the S&P/ASX 200 fell 0.54%.

South Korea’s Kospi fell 0.91%, while the Kosdaq was 1.04% lower.

MSCI’s broadest index of stocks in Asia-Pacific fell 0.44%.

The bottom line is that jumping on softer economic data remains risky until inflation data shows sustained moderation.

In economic news, China’s official manufacturing purchasing managers’ index for June was 50.2, slightly lower than the expected 50.5, according to a Reuters poll.

The 50-point figure separates growth from contraction on a monthly basis, and the index has been below 50 since March.

South Korea’s factory output grew slightly in May, government data shows. Industrial production increased by 0.1% compared to April. Service sector output grew 1.1% in May.

According to government data, Japanese industrial production fell 7.2% in May. That figure was much lower than market consensus and could have been impacted by lockdowns in China, Rob Carnell, ING’s regional head of research in Asia-Pacific, wrote in a note Thursday.

In company news, Toyota Motor missed its monthly production target in May for the third straight month, Reuters reported. Shares of the company fell 0.61% on Thursday.

Meanwhile, Hyundai Motor has decided to postpone the launch of its upgraded hydrogen car, the Nexo SUV, Reuters reported, citing a South Korean newspaper. Shares of Hyundai rose 2 percent.

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In the US, stocks fluctuated overnight on Wednesday after the major averages failed to recover from the previous session, and as the market prepares to close its worst first half since 1970.

The Dow Jones Industrial Average ended the session 82.32 points, or 0.27%, to 31,029.31 as the other benchmarks closed slightly lower. The S&P 500 fell 0.07% to 3,818.83 and the tech-heavy Nasdaq Composite fell 0.03% to 11,177.89.

Interest rate hikes, recession fears and inflation concerns have plagued the market.

ANZ Research said in a note Thursday that markets are “cautious and not holding strong convictions” as central bankers say they will prioritize tackling inflation.

“Basically, until inflation data shows sustained moderation, it remains risky to jump on softer economic data and declare that the spike in central bank interest rates has been priced in for this cycle,” the note said.

Currencies and Oil

The US dollar index, which tracks the greenback against a basket of its peers, stood at 105,185 and rose from below 104 earlier this week.

The Japanese yen traded at 136.61 per dollar after a brief break from the 137 level. The Australian dollar stood at $0.6863 and continued its mostly downward trend for the week.

US crude futures were little changed at $109.60 a barrel, while Brent oil futures fell 0.36% to $115.84 a barrel.

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