Major markets in Asia attempted to bounce back in Monday morning trade after sharp losses last week, even though Chinese manufacturing data released over the weekend and on Monday came in much worse than expected.
Mainland Chinese stocks surged as they attempted to recover from Friday’s steep fall. The Shanghai composite was about 2.7% higher while the Shenzhen component added 2.73%. The Shenzhen composite gained 2.799%. Hong Kong’s Hang Seng index also advanced 0.74%.
The survey release came on the back of data released by the National Bureau of Statistics on Saturday, which showed the official PMI falling to 35.7 in February — the lowest level on record, according to Reuters — as compared to a reading of 50.0 in January. Analysts in a Reuters poll had expected the official 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.
Elsewhere, the Nikkei 225 in Japan recovered from an earlier slip to rise 1.11%. Shares of Sharp were up more than 2.5% 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. South Korea’s Kospi gained 1.3%.
Stocks in Australia, however, continued to decline on Monday, with the S&P/ASX 200 down 0.7% after it tumbled through last week.
Overall, the MSCI Asia ex-Japan index traded 1.03% higher.