Asian Markets Showed Mixed Performance Following Modest Gains On Wall Street; China Services PMI Delivers Hang Seng Boost
In today’s trading, Asian shares showed mixed results on Wednesday as investors evaluated recent data indicating a slowing US economy, presenting both opportunities and risks for Wall Street.
Japan’s benchmark Nikkei 225 fell 1% in early trading to 38,448.61 influenced by USD/JPY trends and Japanese wage data affecting demand for Nikkei-listed export stocks.
In April, average cash earnings rose 2.1% year-on-year, up from a 1% increase in March. Meanwhile, overtime pay decreased by 0.60%, following a 0.50% decline in March. This significant rise in average cash earnings might prompt the Bank of Japan to consider a potential interest hike in 2024 South Korea’s Kospi also surged 1.2% to 2,695.02.
Meanwhile, China Caixin Services PMI rose from 52.5 to 54.0 in May, surpassing the forecast of 52.6. The survey indicated the strongest increase in new business in 12 months prompting firms to boost staffing for the first time in four months.
Input costs rose due to higher prices for materials, labor, and transport, leading firms to raise output prices at the fastest rate since January 2022. Despite this, optimism in the services sector fell to a seven-month low over concerns about the global economic outlook and inflation.
Chinese equity markets responded positively, with the CSO 300 and Shenzhen Composite Index up, and the Hang Seng Index gaining 1.08% due to expectations of a Fed rate cut. Real estate and tech stocks led gains, with notable rises in Alibaba, Tencent, and Baidu.
In Australia, the S&P/ASX 200 went up by 0.3% to 7,759. According to data released on Wednesday, Australia’s economy grew by 0.1% in the first quarter, which some analysts considered weaker than expected.
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