China has the second-largest economy in the world, and it is not surprising that investors are closely monitoring the situation. They want to learn more about the state of the country’s economy. The coronavirus affected Chana as well as other countries in the world. It is worth mentioning that stocks in Asia-Pacific strengthened their positions on Tuesday. A private survey of China’s manufacturing activity helped to boost investor sentiment.
Importantly, mainland Chinese stocks saw gains on the day. The Shanghai Composite added 1.77% to about 3,451.94. At the same time, the Shenzhen Component advanced 1.904% to around 13,930. 37.
Hong Kong’s Hang Seng index gained around 0.9% as of its final hour of trading.
In Japan, the Nikkei 225 added 1.34% to close at 26,787.54. At the same time, the Topix index gained 0.77% to end its trading day at 1,768.38.
Also, South Korea’s Kospi index 1.66% higher at 2,634.25.
Australia’s S&P/ASX 200 advanced 1.08% to finish its trading day at 6,588.50.
China’s factory activity and investor sentiment
As mentioned earlier, a private survey helped to improve investor sentiment. According to a business survey, activity in China’s factory sector accelerated at the fastest pace in a decade in November. Importantly, the world’s second-largest continues to recover to pre-pandemic levels.
Importantly, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 54.9 from October’s 53.6. As a reminder, the gauge remains well above the 50-level that separates growth from contraction for more than six months in a row.
The Covid-19 affected huge swathes of the economy early this year, the country has seen a strong rebound in activity. Interestingly, strict virus containment measures, infrastructure-driven stimulus, strong exports of medical supplies.
It is worth mentioning that the Caixin PMI reading was the highest since November 2010. A private survey, came after an official gauge of factory activity, focusing on larger as well as state-owned firms, increased at the fastest pace in more than three years.
Interestingly, e-commerce shopping promotions in November showed strong consumer demand, boosting confidence for small and medium-sized firms.
Hopefully, economic indicators ranging from trade to producer prices all suggest a further pick up in the industrial sector.
It is worth noting that analysts expect China’s economy to grow by about 2% in 2020, the worst result since 1976. The country has the potential to return to pre-coronavirus levels, but it won’t be easy to reach this result due to local as well as global challenges.
COMMENTS