by Chiara Di Cristofaro and Paolo Paronetto
Services data confirm Beijing’s slowdown, Asian markets in red. Tokyo is saved. Country Garden avoids default and pays 22.5 million coupons
3′ of reading
(Il Sole 24 Ore Radiocor) – Minus sign for the European stock markets after the data on the activity of the services sector confirmed the difficulties of the Chinese economy, pushing down the Asian stocks despite the news of the payment of interest on two bonds in dollars by Country Garden on the day the grace period expires. After the closure of Wall Street on the eve of Labor Day, futures on US indices are declining. Investors await the meetings of the ECB (September 14) and Fed (September 20), to understand whether or not there will be the expected pause in the monetary tightening.
China: services activity slows down to 51.8 points, lowest in 8 months
In China, services activity slowed sharply in August, reaching the lowest levels for eight months. The Caixin Purchasing Managers Index came in at 51.8 points last month versus 54.1 points the previous month, although it remained above the 50 mark and therefore expanding. Forecasts were for an index reading of 53.6 points. The sub-indexes on business performance and new orders remain above 50 points, but slow down compared to July, those on export orders enter a contraction phase for the first time since December. Employment is also expanding, albeit with a slowdown compared to July.
Euro/dollar slightly moved. Breathe the oil
In the foreign exchange market, the Australian dollar is weak after the central bank left interest rates unchanged. Among the major currencies, the euro was little moved at 1.0781 dollars from 1.0791 at yesterday’s close. The single currency is also indicated at 158.32 yen (from 158.01), while the dollar/yen ratio is at 146.85 (from 146.45). The oil price is taking a breather after rising by more than 5% in five days in a market context marked by production cuts in OPEC+ countries. The October future on the WTI marks -0.05% to 85.89 dollars a barrel, while the November contract for Brent oil slips by 0.2% to 88.82 dollars.
Country Garden avoids the default. Chinese stock markets down
Country Garden avoid the default. China’s top private real estate developer, grappling with a severe financial crisis, told its creditors it had made coupon payments on two dollar bonds totaling $22.5 million by the Sept. 5-6 grace period of 30 days. This was reported by Bloomberg, recalling that the coupons were paid in early August and that the bondholders spoke of the episode requesting anonymity. Country Garden, despite the first avoided default, yielded about two percentage points to the Hong Kong Stock Exchange. The entire financial center of Hong Kong is down, Shanghai is also bad.
Tokyo closes at +0.3% with a weak yen after a drop in consumption
The Tokyo Stock Exchange closed trading with a moderate rise supported by the performance of stocks in the real estate sector and the electronic sector. The Nikkei index gained 0.3% to 33,036.76 points. The Topix rose 0.17% to 2377.85 points. The recovery of the indices, initially down, was influenced by the progressive weakening of the yen (which favors groups most exposed to exports) following the data on the contraction in household consumption in July (-5%): the exchange rate between the dollar and the yen it is close to 147 from the 146.45 recorded yesterday afternoon at the close of the European markets. Among the stocks, Sumitomo Realty&Development did well (+3.1%) in the real estate sector, down 6% the stocks of the steel group Jfe Holdings which aims to carry out a capital increase of 200 billion yen (1.37 billion dollars ) also through the issue of convertible bonds.
Central Bank of Australia leaves rates unchanged at 4.1%
Meanwhile, the Reserve Bank of Australia (RBA) in today’s meeting maintained the interest rate at 4.1% for the second consecutive month, the highest since 2012, granting relief to home loan holders, who already face extensive price hikes. Sixteen months ago the rate was at an all-time low of 0.1%. Today’s meeting was also the last chaired by Reserve Governor Philip Lowe, whose seven-year term expires next week. He is succeeded by Michele Bullock, the current lieutenant governor. The RBA’s decision to suspend rates for another month is in line with the expectations of most economists and financial markets, after inflation fell to 4.9% in July, a level below forecasts, but above the central bank’s target of 2-3%. In his latest statement as Reserve governor, Lowe said that although inflation is falling, further rate hikes may be needed to contain it, “to ensure it returns to target in a reasonable time frame.” The Reserve expects inflation to return to its 2-3% target towards the end of 2025 and unemployment to gradually increase to 4.5% by the end of 2024, Lowe added.
To view this content open the page on ilsole24ore.com
Clare Di Cristofaro
Radiocor editor
Paolo Paronetto
Radiocor editor
View on ilsole24ore.com
2023-09-05 07:41:15
#Stock #markets #China #slowdown #weighs #Milan #banks #Mps #line
