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Shanghai gains despite weak Caixin PMI survey, other markets up

Published 06/30/2016, 10:26 PM
Updated 06/30/2016, 10:27 PM
© Reuters.  Shares in Asia gain

Investing.com - Shares in Shanghai gained on Friday despite a disappointing China manufacturing survey from Caixin and an otherwise busy regional data day with investors taking a cue from U.S. gains overnight and prospects for easier monetary policy in Britain post Brexit.

The Shanghai Composite rose 0.42%, while the S&P/ASX 200 gained 0.48% and the Nikkei 225 edged up 0.64%.

Manufacfturing gauges in China released on Friday painted a mixed picture with an unexpected drop in the Caixin survey and an expected result from the China Federation of Logistics and Purchasing (CFLP) and National Bureau of Statistics.

"Overall, economic conditions in the second quarter were considerably weaker than in the first quarter, which means there has been no easing of the downward pressure on growth. Against the backdrop of a turbulent external environment, and in order to avert a sharp economic decline, the government must strengthen its proactive fiscal policy while continuing to follow prudent monetary policy," said Zhong Zhengsheng, Director of Macroeconomic Analysis at CEBM Group in Caixin's PMI release.

Earlier, Australia's the AIG manufacturing index came in at 51.8, above 51.0 for the previous month, the 12th straight month of expansion in the manufacturing industry aided by the fall in the exchange rate over recent years. But businesses in general continue to face uncertainty from the impending federal election.

In Japan national core CPI for May fell 0.4% year-on-year as expected. As well household spending for May dropped 1.1% year-on-year, less than the 1.4% decline seen, but the month-on-month figure fell 1.5%, more than the 0.2% decline expected.

Overall, a slower pace of wage hikes in fiscal 2016 is clouding the prospect for the Bank of Japan guiding inflation to 2% from zero in the next two years. The recent appreciation of the yen will lower import costs and support small firms and households but from the BoJ's viewpoint, it will go against efforts to reflate the economy.

The unemployment rate in Japan for May held steady at 3.2% and the Tankan all big industry CAPEX for the second quarter rose 6.2%, beating the 5.9% gain expected.

Overnight, U.S. stocks were higher after the close on Thursday, as gains in the Consumer Goods, Utilities and Industrials sectors led shares higher.

At the close in NYSE, the Dow Jones Industrial Average gained 1.33%, while the S&P 500 index gained 1.36%, and the NASDAQ Composite index climbed 1.33%.

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