Monday 30th September 2024: Stocks Surge in China While Japan’s Markets Tumble Amid Key Economic Data

Global Markets:

•  Asian Stock Markets : Nikkei down 4.87%, Shanghai Composite up 8.54%, Hang Seng up 3.85% ASX up 0.70%
• Commodities : Gold at $2679.35 (0.34%), Silver at $31.90 (0.24%), Brent Oil at $72.81 (1.56%), WTI Oil at $69.16 (1.47%)
• Rates : US 10-year yield at 3.762, UK 10-year yield at 3.980, Germany 10-year yield at 2.140

News & Data:

• (USD) Core PCE Price Index m/m  0.1% vs 0.2% expected
• (CAD) GDP m/m  0.2% vs 0.1% expected

Markets Update:

Stocks in mainland China surged over 8%, while Japan’s Nikkei 225 fell 4.64% on Monday as investors digested key economic data from both countries. China’s official purchasing managers’ index (PMI) for September came in at 49.8, slightly above the forecast of 49.5, but still signaled a fifth consecutive month of contraction in the manufacturing sector. The Caixin PMI, a private survey by S&P Global, showed a sharper drop, falling to 49.3 from 50.4 in August, missing expectations of 50.5. This marked the steepest decline in 14 months.

Mainland China’s CSI 300 index jumped 6.22%, with the property sector gaining 7.4%. Hong Kong’s Hang Seng index rose 3.34%, driven by consumer stocks, while the Hang Seng Mainland Properties Index soared 8%. Despite the positive performance in Chinese markets, the data still pointed to challenges in the manufacturing sector.

In Japan, the Nikkei’s steep decline was led by real estate stocks. The biggest loser was Isetan Mitsukoshi Holdings, which plunged 11%. Japan’s industrial production dropped 4.9% year-on-year in August, a much larger decline than expected, though retail sales grew by 2.8%, beating estimates of a 2.3% increase. The yen weakened 0.13% against the dollar, trading at 142.38.

Elsewhere, Australia’s S&P/ASX 200 rose 0.72%, reaching a new high, while South Korea’s Kospi fell 1.13%. In the U.S., the Dow Jones Industrial Average gained 0.33% on Friday, driven by optimistic inflation data. The personal consumption expenditures (PCE) price index, a key inflation gauge, rose 0.1% in August, aligning with expectations and showing an annualized increase of 2.2%.

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