Global Weakness In Tech Demand Dragged S Korea's Exports and Taiwan's Economy, Factory Activities Diverged In India and China

Arjun Pandit
01 May, 2023
Mumbai

Asian and European markets are closed for Labor Day holiday and crude oil prices eased. 

Crude oil prices in Asia and London traded down on private trading platforms following the unexpected decline in factory activities in China. 

South Korea's exports fell for the seventh month in a row on the persistent demand weakness for semiconductor chips and shipments to China plunged.  

India's factory activities expanded for the fourth month in a row on the rising new orders and shipments. 

However, export-reliant and tech-focused Taiwan's economy decreased 3.02% from a year ago in the first quarter ending in March and fell 6.37% from the final quarter of 2022. 

The technology hardware and components weakness is driven by a sharp fall in demand for smartphones, personal computers and other advanced electronics products. 

 

China's Manufacturing Activities Eased In April 

China's manufacturing activities slowed in April, the latest data from the National Bureau of Statistics showed over the weekend. 

The official Purchasing Managers' Index declined to a four-month low of 49.2 from 51.9 in March, 

The reading above 50 indicates expansion and below shows a contraction in growth, and the latest data indicated contraction for the first time in factory activities since December. 

Factory output grew the least since January but new orders and purchasing activities declined after advancing in the prior three months. 

 

India's Factory Activities Accelerated In April 

India's factory activity index or purchasing manager's index accelerated to a four-month high of 57.2 in April from 56.4 in March, the S&P Global said in a report Monday. 

Input costs accelerated on the faster price increases for raw materials but output prices rose to a 3-month high. 

Forward looking sentiment improved from an eight-month low in March on higher demand inquiries and clearance of pending order approvals. 

 

South Korea's Exports Fall On Semiconductor Weakness

South Korea's exports declined for the seventh month in a row, the Ministry of Trade, Industry and Energy reported Monday. 

Exports declined 14.2% from a year ago to a three-month low to $49.6 billion, following a 13.6% decline in the previous month. 

The 7-month string of exports decline is the longest period since 2019 and the sharpest fall on the ongoing weakness in semiconductor chip demand. 

Exports to China, South Korea's largest trading partner, dropped 26.5% to China, 4.4% to the U.S. but rose 9.9% to the European Union and 30.3% to the Middle East. 

Chips exports plunged 41% from a year ago and steel products shipments fell 10.7%. 

Imports fell 13.3% in April, the largest fall since August 2020,  resulting in a smaller trade deficit of $2.62 billion compared to $4.63 billion in March.  

Tokyo and Sydney Indexes Advanced 

Most Asian markets were closed for the Labor Day Holiday. 

The Nikkei index increased 0.9% to 29,123.18 and the ASX 200 index in Sydney increased 0.4% to 7,334.60. 

Financial markets in Indonesia, Shanghai, Hong Kong, Indonesia and Thailand were closed.