Investing.com - Shares in Shanghai fell on Monday on mixed PMIs for manufacturing and services, but Sydney and Tokyo rose as expectations of continued easy monetary policy held sway.
The Nikkei 225 rose 1.85% and the S&P/ASX 200 was up 0.75> The Shanghai Composite fell 1.78%. Also in China, the yuan fell against the U.S. dollar Monday after the People's Bank of China set the yuan fixing weaker for the first time in seven trading days.
The yuan was last at 6.5798 against the U.S. dollar shortly before lunch compared with Friday's official close price of 6.5789 and the last trade price of 6.5766.
In China the semi-official manufacturing PMI for January reached 49.4, missing the 49.6 level seen and remaining in contraction and the Caixin Manufacturing PMI index came in at 48.4, a bit above the expected 48.0. As well, Japan reported its manufacturing PMI came in at 52.3, compared to a 52.4 level seen. The non-manufacturing PMI in China hit 53.5, down from 54.4 the previous month.
Figures above 50 suggest expansion and those below contraction.
"The upshot is that economic momentum may have deteriorated last month. That said, we can’t be certain yet," Capital Economics said in a note to clients after the data. "The PMIs provide and early hint of how the economy is performing but we don’t recommend putting too much weight on them. The official manufacturing PMI, in particular, appears to have been a poor gauge of economic activity over the past year."
Earlier, the AIG Manufacturing index in Australia for January came in at 51.5 with last month's reading at 51.9. As well, the MI Inflation Gauge is due for a month-on-month estimate.
In the week ahead, investors will be awaiting a flurry of survey data on manufacturing and service sector growth amid concerns over the outlook for the global economy.
Last week, U.S. stocks surged on Friday after the Bank of Japan provided a jolt to global equity markets worldwide with a surprise decision to lower interest rates into negative territory for the first time in the history of the central bank.
In overnight trading, the Japanese central bank lowered its rate charged to commercial banks that park excess reserves at the central bank to negative 0.1% in a somewhat shocking moved aimed at helping its economy stave off threats of deflation. The move likely increases the possibility that the Federal Reserve could delay its next interest rate hike in the face of weak economic conditions abroad. Any signals of further tightening from the U.S. central are viewed as bearish for U.S. stocks, as investors pile into bonds to take advantage of higher yields.
The Dow Jones Industrial Average gained 393.92 or 2.45% to 16,463.56, while the NASDAQ Composite index added 107.27 or 2.38% to 4,613.95 on a bullish day for stocks. The S&P 500 Composite index, meanwhile, rose 46.75 or 2.47% to 1,940.18, as all 10 sectors closed in the green. Stocks in the Technology, Industrials and Financials industries led, each gaining more than 3% on the session.
Despite Friday's rally, the major indices still ended January with one of their worst months to start a year on record.