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Asia-Pacific stocks mixed as private survey shows China’s factory activity contracted – CNBC

SINGAPORE — Shares in Asia-Pacific were mixed in Wednesday trade, with investors watching for market reaction to the release of a private survey on Chinese factory activity for May.

Mainland Chinese stocks were mixed, with the Shanghai Composite sitting below the flatline while the Shenzhen Component was up 0.419%. Hong Kong’s Hang Seng index slipped 0.74%.

China’s Caixin/Markit manufacturing Purchasing Managers’ Index for May came in at 48.1 on Wednesday, an improvement over April’s reading of 46 but still remaining below the 50-level mark that separates expansion from contraction.

We’re in a relatively calm period, there has been a risk-on environment that’s been triggered by some degree of opening up in China.

Manishi Raychaudhuri

head of Asia-Pacific equity research, BNP Paribas

China’s official manufacturing PMI for May, released Tuesday, came in at 49.6 — an improvement over April’s reading of 47.4. The May reading was above the 48.6 level expected from a Reuters poll.

PMI readings are sequential and represent month-on-month expansion or contraction.

The Nikkei 225 in Japan gained 0.61% while the Topix index advanced 1.19%.

In Australia, the S&P/ASX 200 climbed 0.11%. Australia’s gross domestic product grew 0.8% quarter-on-quarterly in seasonally adjusted chain volume terms during the first quarter, data from the country’s Bureau of Statistics showed Wednesday. That was above expectations in a Reuters poll for a 0.5% gain.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.41% lower.

“We’re in a relatively calm period, there has been a risk-on environment that’s been triggered by some degree of opening up in China,” Manishi Raychaudhuri, head of Asia-Pacific equity research at BNP Paribas, told CNBC’s “Street Signs Asia” on Wednesday. “There has also been commentary, a narrative that the risk perception is way too high among institutional investors.”

“That said, we must also keep in mind that we’re now about to enter a period of quite severe monetary policy tightening,” he added. “We have to brace for the impact at least, you know, in the next one quarter or so.”

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Markets in South Korea are closed on Wednesday for a holiday.

Overnight on Wall Street, the S&P 500 shed 0.63% to 4,132.15. The Dow Jones Industrial Average dropped 222.84 points, or 0.67%, to 32,990.12. The tech-heavy Nasdaq Composite dipped 0.41% to 12,081.39.

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