Asian shares fall as stimulus hopes fade
Asian shares fell on Wednesday as soft Chinese manufacturing data further undermined investor confidence and as hopes faded for bold stimulus action this week by the US Federal Reserve and the European Central Bank to underpin faltering economies.
European stocks were set to open lower, and a 0.1 per cent drop in US stock futures signalled a sluggish Wall Street start. Financial spreadbetters called the main indexes in London, Paris and Frankfurt to open down 0.1 per cent.
China’s official factory purchasing managers’ index fell to an eight-month low of 50.1 in July from 50.2 in June, suggesting the sector is barely growing. Analysts had expected it to edge up to 50.3.
The data underscored how the world’s second-biggest economy was losing momentum, and followed signs of decelerating Asian growth, with major Asian exporters Japan, South Korea and Taiwan all reporting worsening economic stress on Tuesday.
“It is clear that the manufacturing sector is doing very poorly, and requires policy support,” said Dariusz Kowalczyk, senior economist & strategist, Asia ex-Japan at Credit Agricole CIB.