Moderate earnings in Asia – ‘Thorn’ Alibaba in Hong Kong

Most markets in the Asia-Pacific region moved higher on Monday in the wake of the data for the Chinese factory activity which grew at a slower pace in July, according to a private survey, as the country’s strict coronavirus restrictions eased, or were confined to less economically important areas of the country, lessening the economic impact.

In particular, the Caixin manufacturing PMI fell to 50.4 points in July from 51.7 points in June, according to data from Caixin and S&P Global.

The data points in a different direction from the official counterparts released on Sunday, which showed a drop to 49 points from June’s rise of more than 50 points.

Despite the continued growth reflected in Caixin data, sub-indices measuring factory output and export orders softened in July as demand was relatively subdued, as observed by companies surveyed.

“The poor start to the third quarter further raises the risk that China will miss its 2022 GDP growth target of 5.5%,” Venkateswaran Lavanya, an economist at Mizuho Bank, said in a note on Monday.

In this climate, on the mainland China the Shanghai Composite registers a small gain of 0.16%, while the Shenzhen is up 1.1%.

In the Hong Kong the Hang Seng pared its losses to 0.3%, with tech giant Alibaba down 2.2% and intra-session as much as -5%.

On Friday in the US, Alibaba was added to the list of companies at risk of delisting under the Holding Foreign Companies Accountable Act. The US stock plunged 11%.

In Japan the Nikkei 225 gains 0.5% and the Topix gains 0.77%.

In Australiathe S&P/ASX 200 is up 0.52%.

At South Korea the Kospi remains almost unchanged and the Kosdaq adds 0.48%. The country reported a trade deficit for the fourth consecutive month in July as energy imports rose and exports to China, its largest trading partner, fell.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.11%.