Nikkei, Topix and Co Electricity crisis and economic data from China depress Asia stock exchanges
Analysts think it is possible that the energy shortage in China could persist until the end of the year. The view of global markets also unsettles investors in Asia.
Concerns about economic growth in China and a worsening energy crisis weigh on investors in Asia on Wednesday. “It is likely that the energy shortage in China will persist until the end of 2021 as the prefectures are under pressure to meet emissions reduction targets for this year,” said Chaoping Zhu, strategist at JP Morgen. “Investors may be cautious about corporate earnings in China in the fourth quarter.” In the meantime, the volatile global market is expected to continue to weigh on investor sentiment in the near future.
The Nikkei Index, which comprises 225 values, was 0.4 percent lower at 29,439 points. The broader Topix index fell 0.4 percent and stood at 2030 points. The Shanghai stock exchange was up 0.5 percent. The index of the most important companies in Shanghai and Shenzen gained 0.7 percent.
In Asian foreign exchange trading, the dollar lost 0.1 percent to 111.81 yen and stagnated at 6.4679 yuan. In relation to the Swiss currency, it was quoted 0.2 percent lower at 0.9330 francs. At the same time, the euro rose 0.1 percent to 1.1607 dollars and fell 0.1 percent to 1.0832 francs. The pound sterling gained 0.2 percent to $ 1.3449.
China’s industry records unexpected decline – recovery in the service sector
High raw material prices and power outages put pressure on China’s industrial activity in September, while the service sector expanded again after the virus outbreaks subsided. The official manufacturing purchasing managers’ index (PMI) was 49.6 in September, down from 50.1 in August, as data from the National Bureau of Statistics (NBS) showed on Thursday, slipping into contraction for the first time since February 2020. The growth area begins beyond the 50 mark.
Analysts polled by Reuters had expected the index to remain unchanged at 50.1. China’s economy had already largely recovered from the pandemic. However, the momentum has weakened in recent months, as the huge production sector has to contend with higher raw material prices – especially for metals and semiconductors – production bottlenecks and, recently, with electricity rationing due to coal shortages and stricter emission standards.
The official purchasing managers’ index for the non-manufacturing sector was 53.2 in September, rebounding from 47.5 in August, according to NBS data. The recent virus outbreaks in China now appear to have been largely brought under control.
Japanese industry continues to decline
Japan’s industry declines in August for the second month in a row due to persistent chip shortages. Industrial production fell 3.2 percent from the previous month, according to government data on Thursday. In July a minus of 1.5 percent was recorded. In a survey by the Reuters news agency, analysts had expected an average decline of 0.5 percent. The background is the decreased production of cars and electronic machines as a result of the global shortage of semiconductors.
The major Japanese automakers, including Toyota Motor, Nissan and Honda, have had to accept production cuts since the end of August due to a lack of components, which could continue well into October, the industry lobby warned at the beginning of this Month. The manufacturers surveyed by the government, on the other hand, expect production to increase by 0.2 percent in September and 6.8 percent in October.
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