Asia’s stockmarkets slid toward a second month of losses in a row on Wednesday, and even the glittering Nikkei paused, as weak Chinese factory activity fed growing doubts about the post-pandemic recovery in the world’s second biggest economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1% in early trade and is down 2.4% in a month where hopes for robust Chinese rebound have run dry.
Data showed Chinese manufacturing activity contracted faster than expected this month on weakening demand, with the official manufacturing purchasing managers’ index down to 48.2 against a forecast of 49.4.
The yuan fell to a six-month low of 7.1090 per dollar after that and is down more than 2.6% on the month as indicators from output to industrial profits, retail sales and loan growth have missed forecast and in some cases slumped.
“There were concerns China’s economic comeback could be so strong that it would complicate advanced economy central banks’ fight against inflation,” said Carol Kong, economist and currency strategist at the Commonwealth Bank of Australia.