The Caixin General China Manufacturing Purchasing Managers’ Index (PMI), an indicator of manufacturing activity, edged down to 48.2 in December from November’s 48.6 percent.
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The reverse repo has been priced to yield 2.25 percent, unchanged from the yield of a net injection last week of ten billion yuan, using reverse repos.
The PBOC cut its reference rate by 0.22 per cent on Wednesday to 6.5314 per dollar, weaker than both Tuesday’s 4:30 pm level as well as the end-of-the-day rate.
South Korea’s KOSPI was trading lower by 1.68% at 1,928.32; India’s CNX Nifty was down 1.40% at 7,851.60 and Japan’s Nikkei 225 dipped 3.1% at 18,443.05.
ANALYST’S TAKE: China’s factory data is “still a long way off stirring up cheer about global demand recovery”, said Mizuho Bank Ltd.in a daily commentary. “This will continue to limit the scope for stimulus, and suggests further economic deceleration in 2016”, Russ Koesterich, BlackRock’s global chief investment strategist, said in a note to clients.
China’s markets are nursing a hangover, not from a raucous New Year’s Eve, but from a totally insane 2015.
United States stocks have dropped sharply after a plunge in Chinese markets triggered by weak Chinese manufacturing data and escalating tensions in the Middle East.
The offshore yuan fell 0.5 percent to 6.6030 per dollar, edging near a five-year low touched last week.
Liquidity outside of regular Asia hours can be relatively poor, heightening the risk of unrepresentative exchange rates and manipulation, the People’s Bank of China said while announcing the extended trading hours in December.
Global benchmark Brent futures, which fell 35 percent a year ago due to fear of over-supply in a global slowdown, gained as much as 3.3 percent to $38.50 per barrel, the highest in about three weeks.
In the currency market, the safe-haven Swiss franc was bid up, gaining 0.4 per cent against the euro to 1.0849 per euro. The dollar fetched 120.31 yen.
An immediate focus will be on Monday’s ISM survey on US manufacturing, which is expected to show the sector is still in contraction after hitting a 6-1/2-year low in November.
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Though this is in line with market expectations, a reading below 50 indicates a contraction in activity on a monthly basis. Official support for the currency has been more sporadic in recent months as the weakest economic expansion in a quarter century and rising USA interest rates fueled capital outflows.
