Asian markets fall as global manufacturing slows down

KUALA LUMPUR: A resounding “aye” from the US House of Representatives to pass a measure to increase the country’s debt ceiling was not enough to rouse Asian markets on Tuesday, Aug 2 as weak manufacturing data indicated that a slowdown in global economic growth may continue spooked investor.

However, signs are that investors are far more concerned on the longer-term outlook for US economy that is already facing a delibitating business environment and sagging consumer confidence; it must be said that the latest data on a global manufacturing has given little for them to cheer about.

The world’s manufacturing sector fell to its slowest pace in two years in July, as factories reported shrinking orders for the first time since major economies recovered from the financial crisis and recession of 2008.

The Global Manufacturing Purchasing Managers Index (PMI), produced by JPMorgan, slumped to 50.6 in July from June’s 52.3, its lowest level since July 2009, and barely above the 50 mark dividing growth from contraction.

Meanwhile, US stocks fell overnight after the Institute for Supply Management said the US manufacturing sector grew at the slowest pace in two years in July.

On Bursa Malaysia, the FBM KLCI fell 1.78 points to 1,556.23 at mid-morning. Losers led gainers by 246 to 134, while 224 counters traded unchanged. Volume was 175.26 million shares valued at RM150.76 million.

At the regional markets, Japan’s Nikkei 225 fell 1.32% to 9,833.81, the Shanghai Composite Index lost 1.30% to 2,668.70, Taiwan’s Taiex was down 1.31% to 8,587.24, South Korea’s Kospi was down 1.27% to 2,144.70, Singapore’s Straits Times Index shed 0.79% to 3,189.71 while Hong Kong’s Hang Seng Index declined 0.49% to 22,553.39.

Maybank Investment Bank Bhd head of retail research Lee Cheng Hooi in a note to clients on Aug said that due to the US markets’ minor fall last night, there could be some initial selling activities in the local bourse today.

“However, we see a longer-term decline for the local and foreign indices,” he said.

On Bursa Malaysia, decliners at mid-morning included QSR that fell 10 sen to RM6.46, Nestle and Paramount down eight sen to RM47.70 and RM1.97, Uzma, CBIP and Kotra lost seven each to RM1.91, RM4.14 and 51 sen respectively, Hartalega down six sen to RM5.50 while BDB fell five sen to RM1.41.

The Lion group of companies were actively traded this morning. Lion Corp added 2.5 sen to 30 sen with 14.96 million shares done; Lion Diversified added three sen to 55.5 sen while Lion Industries rose 12 sen to RM1.78 with 4.8 million shares traded.

Other actives included Asia Media, DVM , Tricubes and Bertam.

Gainers at mid-morning included Subur Tiasa, United PLANTATION []s, Pulai Springs Kenmark, F&N, Paragon, Nilai and Harrisons.