HONG KONG, Nov 30 (Reuters) – Asian stocks faltered on Wednesday as investors remained cautious about China’s path to reopening its economy after the release of disappointing data on manufacturing, Chinese and Hong Kong stocks having reversed strong gains from the previous day.
The MSCI gauge for Asia-Pacific ex-Japan stocks (.MIAPJ0000PUS) rose 0.02% at 02:01 GMT, erasing earlier losses. At current levels, the index is expected to post its largest monthly increase since April 1999.
Hong Kong’s Hang Seng Index (.HSI) and China’s benchmark CSI300 (.CSI300), however, opened down 0.4% and 0.3% respectively, as Chinese factory activity contracted to a faster pace than expected in November.
Chinese factory activity has deepened this month, an official survey showed on Wednesday, weighed down by slowing global demand and COVID-19-related restrictions.
Losses in Hong Kong and China reversed positive sentiment on Tuesday, when Chinese officials said the country would ramp up COVID-19 vaccinations for the elderly.
The vaccination drive was seen as crucial to lifting nearly three years of tough restrictions in the world’s second-largest economy that have eroded economic growth, disrupted the lives of millions and sparked unprecedented protests over the weekend.
“China’s headlines regarding COVID-related restrictions and protests are causing concern among investors. Although some COVID easing measures are being considered, this may not be enough to prevent further economic disruption,” he said. Anderson Alves, Global Macro Analyst at ActivTrades.
“COVID cases are expected to continue to rise, restrictions will be tightened before the end of the year, leading to more uncertainty about the impact on the economy,” he said. he said Wednesday in a research note.
The Japanese Nikkei 225 (.N225) fell 0.55% while the Australian S&P/ASX 200 (.AXJO) gained 0.29%.
Feelings in the world are cautious in tone. The S&P 500 (.SPX) closed lower on Tuesday as investors awaited indications of the U.S. Federal Reserve’s interest rate hike path.
Fed Chairman Jerome Powell is scheduled to speak on the economy and labor market at a Brookings Institution event on Wednesday. A series of US manufacturing, inflation and employment data will also be released this week.
“This week will provide an interesting test for the markets as we examine the next major macro data points out of the US, particularly the PCE inflation data and the Friday November jobs report,” he said. Redmond Wong, Greater China Market Strategist at Saxo Markets in Hong Kong.
The US ISM manufacturing survey for Thursday is also expected to contract, Wong said.
Oil prices continued to rise after a strong Tuesday, with U.S. crude up 0.873% to $78.87 a barrel and Brent up 0.76% to $83.66 a barrel.
Spot gold rose 0.13%.
In the foreign exchange markets, the dollar index fell 0.2%.
Reporting by Kane Wu; Editing by Tom Hogue
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