Major markets in Asia tried to recover on Monday after substantial losses last week, although Chinese production data released over the weekend was much worse than expected.
Mainland China Shares Rise On Day One Of Spring Trading. Shanghai composite gained 3.15%, reaching about 2970.93 points. Hongkong Hang Seng index also rose 0.75% as of the last hour of trading.
The upward movement on the mainland occurred despite that manufacturing activity in China collapsed to a record low in February. The Markit / Caixin manufacturing (PMI) purchasing managers index fell to 40.3 points, well below the forecast of 45.7. In January, this figure was 51.1.
A study based on data from the National Bureau of Statistics showed that the official PMI fell to 35.7 in February — the lowest level in the history of the country.
«China’s February Manufacturing PMI of 35.7 is in line with those seen during the financial crisis», – by Richard Yetsenga, Chief Economist at Australia and New Zealand Banking Group.
«Businesses are reopening in China, but the vast majority are operating well below their capacity», – he noted.
Japanese Nikkei 225 recovers 0.95%. Promotions Sharp rose 2.2% after Japanese media reports late last week that the company is about to start production of face masks amid shortages caused by the outbreak of coronavirus.
South Korean Kospi added 0.78%. However, stock indices in Australia continued to decline on Monday. S&P / ASX 200 sags up 0.77% to close at 6391.50.
Malaysian postcode FTSE Bursa Malaysia KLCI in the afternoon fell by 0.44%. This followed sensational appointment of a new prime minister after the former prime minister of the country Mahathir Mohamad unexpectedly resigns. Indonesian Jakarta Composite also fell more than 1% after the country confirmed its first two cases of coronavirus.
OCBC’s Vasu Menon told CNBC on Monday that the market recovery came as bad news became good news for indices..
«Downturns in the markets can force politicians to take action. Give them an incentive to solve the problem. Therefore, bad news can turn out to be good, at least in the short term.», – he stressed.
Amid market turmoil, bond yields continue to fall, hitting new record lows. February 29 in the US 10-year Treasury bond yield benchmark broke below 1.04% for the first time in history.
To date, around 85 thousand coronavirus cases have been confirmed worldwide, as well as more than 2,900 deaths.. Australia, Thailand and the United States reported over the weekend of the first deaths on their soil. World Health Organization CEO Tedros Adhanom Ghebreyesus said on Sunday that global markets «must calm down and try to adapt to the current reality».