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

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news