Asian shares sink on weak Chinese data

Beijing Asian stock markets sank on Wednesday after a measure of Chinese service industry activity fell to its lowest level this year.

Shanghai, Tokyo, Hong Kong and Sydney retreated. Oil prices were mixed. US markets were closed on Tuesday for a holiday. A service industry index by a leading Chinese business magazine, Caixin, weakened sharply in June, adding to signs China’s recovery following the end of anti-virus controls is cooling. Growth in factory activity also slowed. “Without policy support, there’s a risk that weakening growth expectations could become self-fulfilling,” said Stephen Innes of SPI Asset Management in a report. The Shanghai Composite Index fell 0.6 per cent to 3,225.68 and the Hang Seng in Hong Kong sank 1.4 per cent to 19,147.37. Caixin’s purchasing managers’ index for services fell to 53.9 from May’s 57.1 on a 100-point scale on which numbers above 50 show activity increasing. Tokyo’s Nikkei 225 lost 0.4 per cent to 33,277.33 and the Kospi in Seoul retreated 0.4 per cent to 2,583.13. Sydney’s S&P-ASX 200 shed 0.3 per cent to 7,254.50 and India’s Sensex opened down 0.2 per cent at 65,384.86. New Zealand and Jakarta gained while Singapore and Bangkok declined.

China is the biggest trading partner for all of its Asian neighbours. Demand for imports got a boost when retailing and factory activity revived, but that rebound cooled faster than expected. Economic activity accelerated to 4.5 per cent in the first three months of 2023 from last year’s 3 per cent.