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Markets Split Across Asia

Asian equity markets started the week on a mixed note as investors digested the latest set of Chinese manufacturing figures and monitored broader global developments.

Japan, South Korea, and Australia registered losses, while Hong Kong and mainland Chinese shares pushed higher, buoyed by strong gains in heavyweight companies like Alibaba.

China’s Manufacturing Picture

China’s RatingDog Manufacturing PMI — formerly the Caixin Purchasing Managers’ Index — came in at 50.5 for August, edging back into expansion territory after July’s contraction reading of 49.5.

Meanwhile, official government data released Sunday painted a more subdued picture, with the official PMI at 49.4, barely changed from July’s 49.3. Together, the numbers highlight a fragile but slightly improving manufacturing environment, with investors hoping Beijing’s recent stimulus measures will support further recovery.

Geopolitical Watch: India-China Relations

Adding to the backdrop, investors also tracked developments at the Shanghai Cooperation Organization summit, where leaders from China and India emphasized cooperation over rivalry. Chinese President Xi Jinping is expected to deliver a speech at the gathering, reinforcing Beijing’s stance on regional stability and development partnerships.

Market Highlights

• Hong Kong: The Hang Seng index surged 2.16%, led by Alibaba Group’s rally of 17.63%, alongside strong moves from BOC Hong Kong Holdings (+8.01%) and WuXi AppTec (+6.86%).
• Mainland China: The CSI 300 added 0.33%, reflecting cautious optimism tied to the PMI data.
• Japan: The Nikkei 225 slid 2.03%, dragged lower by tech-related names including Advantest (-9.04%), Disco Corp (-8.39%), and Socionext (-7.09%). The broader Topix index dipped 0.78%.
• South Korea: The Kospi fell 0.81%, while the small-cap Kosdaq dropped 0.8%, signaling investor caution across the region.
• Australia: The S&P/ASX 200 declined 0.62%, weighed down by weakness in financial and mining sectors.

U.S. Trade Policy and Global Impact

Adding to uncertainty, global markets also reacted to news that a U.S. federal appeals court ruled most of former President Trump’s sweeping tariffs illegal. The court found Trump overstepped presidential authority when invoking emergency powers to impose tariffs on nearly all trading partners.

While the tariffs remain in place until mid-October pending Supreme Court review, the decision has reintroduced volatility into global trade discussions, which Asian investors continue to monitor closely.

Wall Street Recap

On Friday, U.S. markets closed lower after inflation data underscored ongoing price pressures:

• The S&P 500 slipped 0.64% to 6,460.26, though it notched its fourth consecutive monthly gain.
• The Nasdaq Composite dropped 1.15% to 21,455.55, under pressure from tech weakness.
• The Dow Jones Industrial Average edged down 92.02 points (0.20%) to close at 45,544.88.

U.S. markets are closed Monday for the Labor Day holiday, giving global traders a brief pause before the next round of economic updates.

The Outlook

For now, Asian markets remain divided between cautious optimism fueled by China’s modest manufacturing rebound and concerns over global trade policy and inflationary pressures abroad. Investors will be closely watching Beijing’s next moves, the outcome of U.S. trade disputes, and further signals from central banks across the region.

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