Jakarta, CNBC Indonesia – Asian stock markets fell on trading Monday (2/5/2022), the cause of which was China’s economy which was in danger of slowing down. When several stock markets fell, the stock index in China was actually on Labor Day holiday until Wednesday (4/5/2022), while the Composite Stock Price Index (JCI) was off for Eid al-Fitr this week.
Hong Kong and Singapore stock markets as well as Malaysia are also closed in today’s trading.
Japan’s Nikkei index was down 0.54%, while the Topix was 0.38%. South Korea’s Kospi was down 0.5%, and Australia’s ASX fell 1.4%.
Australia is the hardest hit because China’s economic slowdown will have a big impact on its economy. China is Australia’s largest export market.
Data at the end of last week showed contraction in China’s manufacturing sector deepened. The reason is that cases of disease due to the corona virus (Covid-19) are soaring again and forcing the Chinese government to implement lockdown.
China implements a zero Covid-19 policy, once cases start to climb, then lockdown immediately applied.
As a result, manufacturing activity has deepened, as can be seen from the purchasing managers’ index (PMI) in April which fell to 47.4 from the previous 49.5.
PMI released by Caixin also showed a decline to 46 from the previous 48.1.
The PMI uses the number 50 as the threshold. Below 50 means contraction, while above it is expansion.
Thus, China’s manufacturing sector has contracted for the second month in a row.
The non-manufacturing sector also experienced the same thing, even the decline was sharper to 41.9 from the previous 48.4 in March.
“The Omicron coronavirus and the Chinese government’s non-Covid-19 policies were the main causes of the decline in China’s manufacturing activity in April. Industrial production has stalled, supply disruptions have occurred again,” said Rodrigo Cartril, analyst at National Australia Bank (NAB) in a note. quoted CNBC International.
“It is realistic if you look at China’s sharp economic slowdown that will occur in the second quarter of 2022, and if you look at history, the global economy will also follow,” he added.
CNBC INDONESIA RESEARCH TEAM
(pap/pap)
–
