Asian Markets Slide as Disappointing China Caixin PMI Dampens Investor Sentiment

© Reuters.

Investing.com - Asian equities slid in afternoon trade on Wednesday, with Hong Kong’s Hang Seng Index plunging 3%, as weaker-than-expected Caixin PMI data dampened investor sentiment.

The Caixin Manufacturing PMI fell to 49.7 in December from 50.2 last month, marking the first contraction since May 2017. A reading below 50 signals contraction.

The reading confirmed a trend seen in the official PMI that was reported on Monday, which showed a drop to 49.4 in December.

The Caixin/Markit survey focuses mostly on smaller businesses, filling a niche that isn't covered by the official data.

"Even more eye-catching was that 'new orders' in both PMIs fell from expansion in November to contraction in December," said analysts at ING. "This confirms our view that the economy is weak and that stimulus needs to arrive quickly."

The Shanghai Composite and the Shenzhen Component both fell 1.2% by 1:50 AM ET (06:50 GMT).

Evergrande Real Estate Group Ltd (HK:3333) received some focus on Wednesday in Asia after a local newspaper reported that the company raised rents of its centre in Wan Chai by 321% to boost the estimated value of the property.

The estimated value of the China Evergrande Centre stood at HK$22.5 billion ($2.87 billion), up nearly 80% from the price the company paid to acquire the building from Chinese Estates Holdings in 2015, Ming Pao reported.

U.S.-China trade dispute returned to focus as U.S. President Donald Trump said this week that talks between the two countries are “progressing well.”

However, the People’s Daily, China’s state-owned newspaper, said on Wednesday that Beijing “has not given in, is not giving in, and will never give in” in matters related to core national interests.

"Regardless of the development of Sino-U.S. relations, China's strategic choice to deepen reform and opening is unswerving, and we are committed to doing our own thing", the article said.

Meanwhile, South Korea’s KOSPI fell 1.5%. North Korean Leader Kim Jong Un warned that he would take a “new path” in nuclear talks if the U.S. didn’t relax economic sanctions.

“I am willing to sit with the U.S. president any time in the future and will strive to produce outcomes that would be welcomed by the international community,” said Kim.

“However, if the United States does not deliver its promise and misjudge our people’s patience, making unilateral demands to continue sanctions and put pressure on us, we will have no choice but to seek a new path to protect the country’s independence, interests and peace on the Korean Peninsula,” he added.

Down under, Australia’s ASX 200 closed 1.6% lower.

Japan’s Nikkei 225 is closed for a holiday.

In other news, Trump suggested he is willing to make a deal to end a government shutdown, according to reports on Wednesday.

“Border Security and the Wall “thing” and Shutdown is not where Nancy Pelosi wanted to start her tenure as Speaker! Let’s make a deal?” the President said on Twitter.

Parts of the government have now been shut for 11 days, affecting 9 of the 15 federal departments, dozens of agencies, and hundreds of thousands of workers, according to reports.