Asia stocks mixed as Chinese economic data disappoints; automakers topple over

Big 5

Stocks in Asia were mixed on Friday as China’s manufacturing data fell below analysts’ expectations.

Japan’s Nikkei 225 slipped 1.63% to close at 20,601.19, while the Topix index also dropped 1.29% to finish its trading day at 1,512.28.

Mainland Chinese stocks were lower on the day, with the Shenzhen component slipping 0.23% to 8,922.69 and the Shanghai composite was declining 0.24% to 2,898.70. The Shenzhen composite was largely flat at 1,531.86.

Over in Australia, the ASX 200 rose fractionally to close at 6,396.90, while South Korea’s Kospi rose 0.14% to end the trading week at 2,041.74.

In Hong Kong, the Hang Seng index shed earlier gains to slip around 0.7%, as of its final hour of trading.

The moves in the region came as China’s manufacturing activity declined more than expected in May.

The official manufacturing Purchasing Managers’ Index (PMI) for May came in at 49.4, versus expectations of 49.9 by economists polled by Reuters. PMI readings above 50 indicate expansion, while those below that signal contraction.

”If you look into the breakdowns and we can see that the trade related indices have all (fallen) quite significantly, ” Jian Chang, chief China economist at Barclays Asia Pacific, told CNBC’s “Street Signs” on Friday.

“The most recent tariff escalation on 10th of May, I think, has clearly played a role … in driving down … China’s orders and demands and also consumer and business sentiments,” Chang said, referring to the recent escalation of the trade fight between the U.S. and China.

Meanwhile, futures pointed to declines for the major indexes on Wall Street at Friday’s open stateside after U.S. President Donald Trump announced that fresh tariffs would be slapped on all Mexican goods starting from June 10.

“I think Trump has always represented a tail-risk for the equity market and that tail-risk is becoming larger and larger by the day,” Jun Bei Liu, portfolio manager at Tribeca Investment Partners, told CNBC on Friday.

Shares of automakers in Asia took a hit from the tariff announcement, with many using Mexico as a production base to manufacture vehicles for export, according to data from Mexico’s auto industry association AMIA.

In Japan, Nissan dropped 5.31% and Toyota declined 2.85%, while South Korea’s Kia Motors fell 4.49%.

The ongoing trade fight between the U.S. and China also continues to weigh on markets, following a recent escalation in rhetoric.

Chinese Vice Foreign Minister Zhang Hanhui said Thursday that provoking trade disputes amounted to “naked economic terrorism. ” Also, China has reportedly halted soy purchases from the U.S.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.067 after touching an earlier high of 98.173.

The Japanese yen traded at 108.82 against the dollar after seeing an earlier low of 109.62, while the Australian dollar changed hands at $0.6910 after seeing a prior low of $0.6898.

Oil markets continued their slide in the afternoon of Asian trading hours on Friday. Brent crude futures fell by 1.87% to $65.62 per barrel, and U.S. crude futures also declined 1.38% to $55.81 per barrel.

source: CNBC