Asian stocks slid on Monday after soft Chinese factory surveys stoked global increase concerns, while the dollar edged back against the safehaven yen as risk appetite waned.
MSCI’s broadest index of Asia Pacific shares outside Japan lost 0.6 percent. Chinese stocks fell in early trade, with Shanghai stocks dropping 0.7 percent and Hong Kong’s Hang Seng down 1 percent. State media reported authorities had arrested two executives -owned fund which allegedly pocketed countless millions of dollars from futures trades that were irregular.
China’s factory action fell in October for an eighth straight month, the Caixin purchasing manager’s index (PMI) showed, fuelling fears the market may still be losing momentum in the fourth quarter despite a raft of stimulus measures.
The Caixin figures followed Sunday’s official survey, which revealed activity in the manufacturing sector in China unexpectedly contracted for a third straight month in October.
Australian shares were down 1.4 percent and Tokyo’s Nikkei retreated 1.7 percent.
“Global market stresses triggered selling while the marketplace was prone to profit taking from last week’s increases,” said Hikaru Sato, a senior technical analyst at Daiwa Securities in Tokyo.
The dollar lost 0.2 percent to 120.435 yen as the drop in Tokyo shares cooled danger desire and favoured the safe-haven Japanese currency. The dollar was after the BOJ on Friday incorrect-footed investors who had wagered on the Japanese central bank lifting the greenback and easing policy.
Rates didn’t raise but caused a stir by leaving the door open to get an increase in December, again emphasizing the divergence in monetary policies between the Fed and other central banks like the European Central Bank as well as the BOJ.
“U.S. economic data bear importance for the December FOMC decision and could drive higher FX and rate volatility in the coming weeks,” strategists at Barclays wrote.
“The October FOMC statement was somewhat more hawkish than our anticipations, and together with the appraisal on global danger having been removed, we believe there exists an obvious effort by the FOMC to keep a December increase on the table.”
The Australian dollar was business at $0.7140 .
In commodities, crude oil prices fell, not able to keep up gains made on Friday on the most recent decline in the U.S oil rig count. U.S. output may be falling but international supplies of crude and refined petroleum products continue to grow, weighing down the marketplace. [O/R]
U.S. petroleum was down 0.5 percent at $46.36 a barrel .