The Tokyo Stock Exchange started trading cautiously, after the contraction of US stock indexes and awaiting the final vote of the US Congress to raise the debt ceiling to avoid default. At the opening, the Nikkei reference list marks 30,889.90 (+0.01%). On the currency market, the yen continues its revaluation phase, at 139.20 against the dollar, and at 148.85 against the euro. In negative territory, however, the Hong Kong Stock Exchange, which opened the session in negative territory: the Hang Seng index lost 0.24%, slipping to 18,190.27 points. The opening of the session was also negative for the Chinese Stock Exchanges: the Shanghai Composite index dropped 0.26%, to 3,196.15 points, while that of Shenzhen lost 0.25%, slipping to 1,998.12.
This came as manufacturing conditions in China improved for the first time in three months in May, according to the latest PMI data from Caixin. Production expanded at the fastest pace in nearly a year, supported by a renewed increase in stronger customer demand. This in turn contributed to the increase in purchasing activity and input inventories. At the same time, further improvement in supplier capacity has helped reduce average lead times and ease cost pressures. In particular, input costs fell sharply in May and firms often passed the savings on to customers in the form of lower selling prices. However, business confidence on the 12-month manufacturing outlook slipped to a seven-month low amid concerns about lingering global economic uncertainty. As a result, firms maintained a cautious approach to hiring, and employment fell further in May. The Purchasing Managers’ Index (PMI), a composite indicator designed to provide a single-digit snapshot of operating conditions in the manufacturing economy – rose from 49.5 in April to 50.9 in May. The latest reading passed the neutral 50.0 level, signaling the first improvement in the health of the manufacturing sector.
