Asian Equities Slide after China PMI

Asian share markets stumbled on Monday and the Australian dollar took a hit after disappointing news on Chinese manufacturing underlined the need for further policy stimulus in the world’s second biggest economy.  The HSBC/Markit Purchasing Managers’ Index (PMI) fell to 48.9 in April – the lowest level since April 2014 – from 49.6 in March, as demand faltered and deflationary pressures persisted.

“China’s manufacturing sector had a weak start to Q2, with total new business declining at the quickest rate in a year while production stagnated,” said Annabel Fiddes, an economist at Markit.  “The PMI data indicates that more stimulus measures may be required to ensure the economy doesn’t slow from the 7 percent annual growth rate seen in Q1.”

The Australian dollar, often used as a proxy for China risk, fell a quick 20 ticks to $0.7812, though upbeat data at home helped put a floor under it.  Shanghai shares were off 0.6 percent, while the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.3 percent.

Reuters

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