Southeast Asia stocks - Markets rise as China factory activity rebounds

Cornelia Mascio
Марта 31, 2020

China's official manufacturing purchasing managers' index (PMI) bounced to 52.0 in March, up from a record-low 35.7 in February and topping forecasts of 45.0. The data suggested both sectors to have improved in March following a sharp decline in February that was attributed to the widespread Coronavirus that has so far infected more than 788,200 people worldwide and caused over 37,800 deaths.

There were also hopes a survey of Chinese manufacturing due later would show a sizable improvement for March as factories began to re-open.

Analysts cautioned the result could even be higher given that the index measures the net balance of firms reporting an expansion or contraction in activity. The figure was recorded at a much lower 35.7 in February. In February, the index had sunk sharply to 29.6 in China.

While the data were better-than-expected, economists said there were obstacles to a protracted recovery.

According to the National Bureau of Statistics, China worked committedly towards preventing and controlling the flu-like virus in March.

Nomura analysts Lu Ting, Wang Lisheng and Wang Jing said in a note ahead of the PMI data release that they expect "deeply negative growth for nearly all activity data in March", given the relatively slow business resumption rate and slump in external demand.

The country needs to "understand the unprecedented severity and complexity of the current domestic and worldwide economic situation" and "return to work and production and expand domestic demand", the group said.

"Investors, who are awaiting dire economic data from the United States and Europe, were also expressing a bit of scepticism over the strength of China's data", Campbell said. The second half is expected to put the economy on track to recover back to the pre-virus level provided that the pandemic is controlled in this time period.

China is the world's largest producer and consumer of industrial metals. The rate of workers' return to work was posted at 89.9%.

The Australian dollar changed hands at $0.6159, still above levels below $0.6 seen last week.

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