China’s shares dropped on Monday, following the evident signs of weakening in the Chinese economy. However, financial markets in the rest of Asia are soaring for a second trading day.
The SHCOMP, Shanghai Composite Index boasted -1.78% at 2688.85, right after Chinese officials reported China’s manufacturing purchasing managers index dipped to 49,4, thus contributing to the sixth-month trend of contraction, not to mention the lowest level since August, 2012.
This year China’s manufacturing sector is facing even more challenges, as the government intends to cut down on excess industrial capacity and get rid of unprofitable companies, which get used to surviving on bank loans as well as government subsidies.
Meanwhile, Japan’s NIK, Nikkei Stock Average ended up with 1.98% on Friday, when the BOJ shocked investors by decreasing interest rates to negative values. The market also surged amid quite solid earnings results.
Investors are currently weighing the potential for quantitative easing from major banks throughout the world and Japan’s latest moves, against constantly decreasing oil prices and China’s economic slowdown. That’s an obvious reason of this mixed performance in Asian financial markets.