Asian shares slipped on Monday amid concerns of China’s economic momentum despite a private survey on manufacturing showing better-than-expected results.
The Shanghai Composite dipped 0.14%, the S &P/ASX dropped 1.33%, and then Nikkei 225 slipped 2.2%.
The AI Group manufacturing survey in Australia dropped 1.9 points to reach 50.2. The inflation gauge for October remained unchanged, while treatable inflation dropped the first time in nearly 4 months.
Building approvals in Australia climbed 2.2%, which supported the reserve banks projection of continued building construction growth. The RBA will release its views on housing construction in its Quarterly Statement on Monetary Policy Friday.
China is facing a unique start to the fourth quarter, with two official PMIs being released over the weekend that suggests the economy is not responding to the monetary easing measures put in place this year.
October’s official manufacturing PMI was 49.8, unchanged from September. A reading below 50 indicates contraction. Non-manufacturing PMI dropped to 53.1 from 53.4, its lowest level since December 2008.
Both PMI readings suggest that China’s economy is facing increasing stress. The country’s biggest industrial companies are reporting disappointing nine-month results.
Premier Li Keqiang has offered investors reassurance over the weekend that China’s economy can still attain medium to high-level growth and that the country’s consumption still has plenty of room to grow.