Asia Mixed as China Data Underwhelms

Asia Pacific markets declined Thursday as a private survey showed Chinese factory activity contracted in July while official data revealed South Korea’s exports fell.

The Nikkei 225 in Japan regained 19.46 points, or 0.1%, to 21,540.99

The Japanese yen traded at 109.08 against the U.S. dollar, weakening from the 108.5 handle in the previous session.

In Hong Kong, the Hang Seng Index fell another 212.05 points, or 0.8%, to 27,565.70. Hong Kong-listed shares of Standard Chartered jumped 2.9% after the lender announced a larger-than-expected first half profit.

Korean markets demurred, as shares of major chipmaker SK Hynix were up 1% while Samsung Electronics declined 0.3%.

Trade numbers for July showed South Korean exports fell 11% on-year, which was slightly better than the 11.3% descent analysts had predicted. In particular, semiconductor exports dropped 28.1%. Imports declined 2.7% compared to the 8.1% drop expected.

The trade numbers came amid an ongoing dispute between Seoul and Tokyo. Last month, Japan placed restrictions on exports of important high-tech materials to South Korea used by tech companies.

The situation could escalate further if Japan removes South Korea from a list of trusted trade partners that enjoy preferential treatment.

Prime Minister Shinzo Abe’s cabinet plans to endorse Seoul’s removal from the so-called "white list," which is expected to go into effect late August, the Nikkei business daily reported.

On Thursday, South Korea said its security cooperation with Japan may be hurt if Tokyo removes the country from the list after ministerial talks in Thailand failed to yield any results.

Australian stocks also went south, as miner Lynas dropped 3.1% as the future of an operating license renewal in Malaysia remains in question for the world’s only major rare earths producer outside China.

The Australian dollar changed hands at $0.6848 after dropping from highs around $0.690 yesterday.

CHINA

In Shanghai, the CSI 300 slid 31.89 points, or 0.8%, to 3,803.47.

A private survey showed Chinese factory activity contracted in July. The Caixin/Markit factory Purchasing Managers’ Index came in at 49.9 — slightly better than the 49.6 reading analysts had expected. PMI readings above 50 indicate expansion, while those below that signal contraction.

That number came after official data released Wednesday showed Chinese factory activity contracting for the third straight month in July.

The United States and China wrapped up a round of trade talks on Wednesday and will resume negotiations in Washington in early September.

In other markets

In Korea, the Kospi index faded 7.21 points, or 0.4%, to 2,017.34

In Singapore, the Straits Times Index dropped nine points, or 0.3%, to 3,291.75

In Taiwan, the Taiex Index let go of 92.06 points, or 0.9%, to 10,731.75

In New Zealand, the NZX 50 inched higher 3.07 points to 10,860.82

In Australia, the ASX 200 flopped 23.63 points, or 0.4%, to 6,788.93