China’s services sector activity expanded into a fourth straight month in August according to an industry survey. The Caixin/Markit services’ Purchasing Managers Index fell to 54.0 from July’s 54.1. The 50-mark separates monthly growth from contraction. Stocks were mixed on Thursday, as investors reacted to the news regarding the regional economic data.
It is worth noting that, mainland Chinese stocks saw losses on the day. The Shanghai Composite fell 0.58% to around 3,384.98. Meanwhile, the Shenzhen Component dropped 0.828% to about 13,772.37.
Hong Kong’s Hang Seng index 0.49% as of its final hour of trading.
South Korea’s Kospi index added 1.33% to end its trading day at 2’395.90.
In Japan, Nikkei 225 gained 0.94% to close at 23’465.53. The Topix index added 0.48% to 1’631.24.
Moreover, Australia’s S&P/ASX 200 advanced 0.81% to 6’112.60. Interestingly, the moves came after as the Australian Bureau of Statistics trade data for July showed exports declining 4% month-on-month.
On September 2, the S&P 500 added 1.5% to end its trading day at 3’580.84. The Nasdaq Composite advanced 1% to 12’056.44. The Dow Jones Industrial Average saw its first close above 29’000 since February as it added 454.85 points or 1.6% to 29’100.50.
Investors and the world’s second-largest economy
As stated above, the Caixin/Markit services’ Purchasing Managers Index came in at 54.0. Investors are closely monitoring the situation.
Notably, the recovery process of the services sector which accounts for 60% of the economy and half of the urban jobs, is not over yet. Hopefully, the recovery has gathered pace in recent months as authorities lifted restrictions on public gatherings.
Moreover, service firms remained optimistic regarding business prospects as the country’s economy continues to recover from the pandemic. However, a sub-index for confidence in the year fell from July’s multi-year high.
Last but not least, many analysts expect the country to be the only major economy to reach annual growth in 2020.