Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: China manufacturing slips

While you were sleeping: China manufacturing slips

Jan 24 (BusinessDesk) – Equities on both sides of the Atlantic dropped after a report showed that China’s manufacturing is headed for a contraction this month, fuelling concern about the sustainability of the global economic recovery.

A preliminary survey from HSBC and Markit Economics showed a reading of 49.6 for China’s Purchasing Managers’ Index, down from a final reading of 50.5 in December and the lowest in six months.

“The marginal contraction of January’s headline HSBC Flash China Manufacturing PMI was mainly dragged by cooling domestic demand conditions,” Hongbin Qu, chief economist, China & co-head of Asian economic research at HSBC, said in a statement. “This implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth. As inflation is not a concern, the policy focus should tilt towards supporting growth to avoid repeating growth deceleration seen in [the first half of] 2013."

In afternoon trading in New York, the Dow Jones Industrial Average shed 1.05 percent, the Standard & Poor’s 500 Index sank 1.09 percent, while the Nasdaq Composite Index dropped 0.97 percent. Slides in shares of American Express, last down 2.3 percent, and those of JP Morgan Chase, last 2.2 percent weaker, paced losses in the Dow.

"The China data continues to be persistently weak," Jim Russell, senior equity strategist for US Bank Wealth Management in Cincinnati, told Reuters.

In Europe, the Stoxx 600 Index slid 1 percent, as did France’s CAC 40. The UK’s FTSE 100 gave up 0.8 percent, while Germany’s DAX dropped 0.9 percent.

“We are scared about a slowdown in China,” Paolo Vicentini, who is responsible for total return strategies at Edmond de Rothschild in Milan, told Bloomberg News. “If the economy does not keep growing at the same pace, companies in key European countries like Germany which depend on Chinese demand will suffer.”

The latest US economic data were a mixed bag. The preliminary US PMI fell to 53.7 this month, down from 55.0 in December, according to Markit.

“The flash PMI indicates that the manufacturing sector continued to grow at the start of 2014, and that the underlying trend most likely remained reassuringly robust,” Chris Williamson, chief economist at Markit, said in a statement.

Separately, jobless claims rose by 1,000 to 326,000 last week, less than the 330,000 economists had expected, while sales of previously owned homes increased 1 percent in December to a 4.87 million annual pace. Sales for 2013 were the highest since 2006.

“We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population,” Lawrence Yun, NAR chief economist, said in a statement.

In the euro zone, both consumer confidence and manufacturing output rose more than expected in January, according to separate reports released today.

The latest US earnings offered both disappointment and reasons for optimism. Netflix did the latter, boosting its shares by 15.9 percent, as the company’s outlook surpassed expectations.

Shares of American Eagle Outfitters tumbled, however, last 9.1 percent weaker, after the company announced that its CEO is leaving.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Restrictions Lifted: No Further Tau Flies Found

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Manurewa, Auckland, due to the Tau fly, have been lifted as of 2.26pm on Sunday 7 February. More>>

Crowdfinding: Awaroa Beach To Become Public Land If Appeal Succeeds

Conservation Minister Maggie Barry says a privately-owned beach will become part of the Abel Tasman National Park if an online crowdfunding campaign to buy it succeeds... More>>

ALSO:

Meat Workers Union: Waitangi Mondayisation Flaunted By Large Employer Of Maori

At the AFFCO Talley owned meat plant in Rangiuru, the company has resorted to bullying and threats... saying they could be disciplined and their union sued for an unlawful strike if workers exercise their rights to a paid day off tomorrow. More>>

Earlier:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news