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    Australian shares fall more than 2% as Chinese factory activity plunges below expectations amid virus impact

    Major markets in Asia mostly declined in Monday morning trade as official Chinese manufacturing data released over the weekend came in much worse than expected.

    The Nikkei 225 in Japan declined 0.86% in early trade as shares of FamilyMart dropped 2.1%. Shares of Sharp were up about 1% following reports from Japanese media late last week that the firm is set to start making face masks amid a shortage caused by the coronavirus outbreak.

    Stocks in Australia continued to decline on Monday morning, with the S&P/ASX 200 down more than 2.5% after it tumbled through last week.

    South Korea’s Kospi bucked the overall trend as it rose 0.53%.

    Overall, the MSCI Asia ex-Japan index traded 0.07% lower.

    Factory activity in China plunged in February as the country dealt with the economic impact of the virus outbreak, according to data released by the National Bureau of Statistics on Saturday. The official Purchasing Managers’ Index (PMI) fell to 35.7 in February ⁠— the lowest level on record, according to Reuters — as compared to a reading of 50.0 in January. The 50-point level in PMI readings separates growth from contraction.

    Analysts in a Reuters poll had expected the February PMI to come in at 46.0.

    “China’s February manufacturing PMI at 35.7 is comparable to the sort of outcomes seen during the financial crisis,” Richard Yetsenga, chief economist at Australia and New Zealand Banking Group, wrote in a note dated Mar. 2. “While businesses are restarting operations in China, the vast majority are operating well below capacity, and many restrictions on the movement of people remain.”

    Investors now await the release of a private survey of Chinese manufacturing activity in February. The Markit/Caixin manufacturing PMI is expected to be out at 09:45 a.m. HK/SIN on Monday.

    Meanwhile, stock movements in Malaysia will also be watched on Monday following the shock appointment of a new prime minister after the country’s former premier Mahathir Mohamad unexpectedly resigned last week.

    • Shares in Asia were mixed in Monday morning trade.
    • Factory activity in China plunged in February as the country dealt with the impact of the coronavirus outbreak, according to data released by the National Bureau of Statistics on Saturday.
    • The official Purchasing Managers’ Index (PMI) fell to 35.7 in February ⁠— the lowest level on record, according to Reuters — as compared to a reading of 50.0 in January.

    Source CNBC

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