BEIJING: Chinese shares dropped with Australia’s dollar and copper futures halted a seven-day rally as a private China factory gauge showed a faster-than-estimated contraction. US oil slipped, while gold climbed.
The Shanghai Composite Index slid as much as 1.2 per cent by 10:58 am in Tokyo, while a gauge of mainland companies listed in Hong Kong erased earlier gains. Copper futures slid 0.9 per cent on the Comex. The Aussie lost 0.5 per cent, as the Bloomberg Dollar Spot Index extended Friday’s 0.6 per cent rebound. The Korean won also retreated. Gold climbed 0.4 per cent. US oil was at US$58.77 a barrel.
The final April Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics fell to 48.9, the lowest since in a year, with the China Securities Journal forecasting second- quarter economic growth will slow to 6.8 per cent. Australia’s central bank reviews rates Tuesday. The dollar pared a third weekly decline Friday, rallying against major peers as two Federal Reserve officials said US interest rates could be raised at any time.
“Expectations of further stimulus have been the key driver for Asian equities,” Evan Lucas, a markets strategist at IG Ltd in Melbourne, said by phone. “There’s probably a risk of a short-term pullback for the market. But medium-term, the bias will probably be on the upside. China has got so many levers to pull so they’re in a slightly comfortable position. They’re trying to moderate the slowdown.” Dollar Moves The factory reading missed the median estimate of 49.4 in a Bloomberg survey and was lower than the preliminary reading of 49.2. Numbers below 50 indicate contraction. The deterioration contrasts with the official manufacturing PMI for April that suggested a stabilization.
