South Korea Exports Surged, China Private Manufacturing Survey Shows Expansion

Arjun Pandit
01 Feb, 2024
Mumbai

Asian markets traded in a tight range, and tech stocks were under pressure in Japan following the steep decline in overnight trading in New York.

The U.S. Federal Reserve held its key lending rate range for the fourth time between 5.25% and 5.50% and clarified that interest rates are not likely to be trimmed in the immediate future, dashing hopes of a rate cut at the end of the next policy meeting in March.

The S&P 500 index closed down 1.6%, and the Nasdaq Composite dropped 2.2%.

The Nikkei 225 decreased 0.8% to 36,011.46, and technology stocks led the decline.

Tokyo Electric Power, Sony Group, Kawasaki Kisen, Fast Retailing, and Toyota Motor declined between 1.5% and 2.0%.

Nomura Holdings rose more than 5% after the financial services provider reported better-than-expected quarterly results.

ANA Holdings and East Japan Railways also gained more than 1% after reporting financial results.

Elsewhere in the region, the ASX 200 index decreased 1.2% to 36,011.46 after trading at a new record high in the previous session.

Banks, miners, and real estate stocks were among the leading decliners in Sydney trading.

In Seoul, the KOSPI index soared 1.7% to 2,540.35, and South Korea swung to a trade surplus in January.

 

Broad  Recovery Lifts South Korea Exports 

The Ministry of Trade, Industry, and Energy (MOTIE) announced the monthly update on Thursday.

South Korea’s exports increased 18.0% from the previous year to $54.7 billion. Imports decreased 7.8% to $54.4 billion, and the trade balance stood at a surplus of $0.3 billion.

The trade balance was in surplus for January, extending the surplus for the eighth consecutive month since June 2023.

Generally, international trade in January recorded a deficit, but this year’s trade balance improved by $13 billion from the previous year, boosted by strong exports.

By destination, eight of the nine major markets saw growth in January.

Specifically, shipments to China and the U.S. surpassed the $10 billion thresholds for the sixth and fifth consecutive month, respectively.

 

China Indexes Rebound After Private Survey Show Manufacturing Expanded

Market indexes in China rebounded from five-year lows after a private survey showed the manufacturing sector expanded for the third month in a row in January.

China's manufacturing sector continued to grow at a stable rate, and the Caixin PMI Manufacturing Index was unchanged at 50.8 in January, contrasting the official survey released Wednesday.

Caixin surveys about 650 private and government companies primarily located in China's coastal region with a strong focus on export activities.

The official survey from the NBS, which gathers data from a wider sample of 3,200 companies, showed factory activities contracted in January after the Manufacturing PMI index edged slightly higher from the previous month to 49.2.

The CSI 300 index rose 0.6% to 3,235.11, and the Hang Seng index jumped 1% to 15,648.02.

Alibaba Group, NetEase, JD.com, Meituan, Baidu, and Tencent rebounded between 2% and 3%.

Hong Kong left its interest rate unrevised at 5.75% following the Fed's decision to hold rates steady.

Property developers Sun Hung Kai declined 1%, New World Development rose 3.5%, and Henderson Land Development added 1.5%.

 

Record Highs In India Indexes

Market indexes in Mumbai rebounded from early doldrums as investors awaited the release of the interim budget.

The index tracking growth of eight key infrastructure sectors slowed to a 14-month low of 3.8% in December 2023, the Office of the Economic Advisor reported Wednesday.

The eight core industries collectively weigh 40.27% in the index of industrial production.

The new government spending has been on hold, and private sector capital spending has been lackluster ahead of the Lok Sabha election scheduled between April and May.

The Nifty and the Sensex indexes struggled in early trading amid weak Asian markets and a sharp decline in New York overnight trading.

The Sensex index increased 280.49 points to 72,033.15, and the Nifty index rose 71.05 points to 21,805.30.

On the Mumbai stock exchange, 265 stocks traded at their 52-week highs, and 11 stocks sank to their 52-week lows.

The yield on the 10-year Indian government bonds increased to 7.14%, and the Indian rupee held steady at ₹83.03 against the U.S. dollar.

Bajaj Auto rose 0.9% to ₹7,733.60 after the 2- and 3-wheel vehicle maker reported January sales.

Vehicle sales in January jumped 24% from a year ago to 356,010 from 287,935 a year ago.

Domestic vehicle sales surged 31% to 230,043 and exports increased 12% to 126,967 from a year ago, respectively.