TOKYO: Asian stock markets were lackluster Thursday after China’s economy showed new signs of weakness and Fed minutes shed little light on the timing of a U.S. interest rate hike.
Japan’s Nikkei 225 added 0.5 percent to 20,289.67 while Hong Kong’s Hang Seng shed 0.1 percent to 27,570.49. South’s Korea Kospi dropped 0.6 percent to 2,126.23 and most markets in Southeast Asia also were lower. China’s Shanghai Composite added 0.9 percent to 4,483.19 and Australia’s S&P/ASX 200 rose 0.8 percent to 5,652.70.
Manufacturing in China shrank for the third straight month in May as demand remained soft, raising the chances of more stimulus to prop up growth in the world’s No. 2 economy. HSBC’s preliminary manufacturing index, based on a monthly survey of purchasing managers, came in at 49.1. That’s slightly better than the 48.9 recorded in April but still in contractionary territory on the 100-point index. Numbers above 50 indicate expansion.
The minutes of the U.S. Federal Reserve’s meeting from April showed that policymakers at the central bank generally thought June was too early to raise rates. That was not a surprise but the minutes didn’t provide any hint about how long the bank would wait after June before hiking its policy rate for the first time since the global financial crisis.
“Trade is choppy but positive. I don’t like fighting momentum which is still to the upside. However, I have not seen this sort of trading indifference in markets for several years,” IG market strategist Evan Lucas said in a commentary. “I am hyper-vigilant currently as there are several global and fundamental factors that could cause markets to topple over in the middle of the calendar year.”
