BEIJING — Asian stock markets were mixed on Thursday after the US economy contracted and China reported stronger factory activity.
Shanghai and Hong Kong won, while Tokyo and Seoul fell. Oil prices advanced.
Wall Street’s benchmark S&P 500 index fell 0.1% on Wednesday after data showed the US economy contracted in the first quarter due to high inflation and declining consumer confidence.
Investors are concerned about signs that the world’s largest economy could be in recession due to interest rate hikes imposed to cool rising inflation.
“Demand for equities could remain subdued for the next four to six months as interest rate hikes feed through to the US economy,” Stephen Innes of SPI Asset Management said in a report.
The Shanghai Composite Index rose 1.4% to 3,406.82 after an official monthly gauge of factory activity rose and new orders improved. The Hang Seng in Hong Kong gained 0.2% to 22,032.70.
Tokyo’s Nikkei 225 fell 1.4% to 26,394.77 after industrial production fell 7.2% in May compared to the previous month. That was the sharpest drop since the start of the coronavirus pandemic in early 2020 and largely reflected the disruptions in China caused by the pandemic.
The Kospi in Seoul lost 1.6% to 2,339.70, and the S&P-ASX 200 in Sydney fell $1.1 to 6,625.40.
The Indian Sensex opened 0.1% at 53,081.17. New Zealand, Singapore, and Bangkok advanced, while Jakarta declined.
The S&P 500 fell to 3,818.83 after official data showed that economic activity contracted 1.6% year-on-year in the three months ending in March. That was the first contraction since the second quarter of 2020 at the nadir of the pandemic.
The US benchmark is down 7.6% this month and 20% from its January 3 peak.
The Dow Jones Industrial Average rose 0.3% to 31,029.31. The Nasdaq composite fell less than 0.1% to 11,177.89 points.
“Not only is a recession the base case, but I think it’s already started,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Federal Reserve Chairman Jerome Powell said at a European Central Bank meeting in Portugal on Wednesday that there is “no guarantee” that inflation can be tamed without hurting the labor market.
The global economy has been rocked by anti-virus measures that have shut down Shanghai and other industrial centers in China. Russia’s invasion of Ukraine increased oil, wheat, and commodities prices.
In a monthly purchasing managers index released Thursday by China’s statistics bureau, an industry group rose from 49.6 to 50.2 on a 100-point scale in June, with numbers above 50 indicating activity is picking up. It came after factories, shops, and offices in Shanghai and other cities were allowed to reopen.
In the energy markets, the US benchmark crude gained 10 cents to $109.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 to $109.78 on Wednesday. Brent oil, the price base for international oil trade, added 25 cents to $112.70 a barrel in London. It lost $1.72 in the previous session to $116.26. per barrel.
The dollar fell to 136.38 yen from 136.54 yen on Wednesday. The euro fell from $1.0523 to $1.0452.
