Markets in the Asia-Pacific region were down on Monday as a survey said business confidence in China reached the lowest level ever recorded.
The lossmaking trend came while earlier reports also suggested an imminent surge in Covid cases and deaths in the country.
It also followed the Wall Street which marked its second consecutive week of losses for the first time since September amid growing concerns over the US Federal Reserve continuing to hike rates.
On Monday, markets in both Mainland China and Hong Kong were leading the losses. The Shanghai Composite fell 1.92 percent – by the time this report was being filed – after the city announced it would shut most schools as the number of Covid cases were on the rise. The Shenzhen Component fell 1.51 percent and Hong Kong’s Hang Seng index fell 0.53 percent.
It is clear that the assurance given by the Chinese officials to stabilize the country’s economy in 2023 and maintain ample liquidity in financial markets in order to meet key targets hasn’t worked for now. The statement carrying the promise was released following the annual budget-setting Central Economic Work Conference last week.
Meanwhile, the People’s Bank of China is slated to set rates for its one and five-year Loan Prime Rates (LPR) on Tuesday.
As far as other markets are concerned, the S&P/ASX 200 in Australia traded 0.21 percent lower to 7,133.9. In Japan, the Nikkei 225 fell 1.05 percent to 27,237.64 and the Topix lost 0.76 percent to 1,935.4. South Korea’s Kospi was down 0.33 percent to 2,352.17.
Business confidence in China hits all-time low
Business sentiment in China fell to the lowest ever recorded by the World Economics Sales Managers Survey since its start in 2013.
The all-sectors index on business confidence in China fell to 48.1 in December, according to a survey conducted by the organization.
“The survey suggests strongly that the growth rate of the Chinese economy has slowed quite dramatically, and may be heading for recession in 2023,” it said in the report. “The lights may not have gone out, but prospects for economic growth in 2023 have certainly dimmed.”
According to the World Economics Sales Managers Survey, business Confidence in the service sector is similarly at an all-time low.
But in manufacturing, the Confidence Index is slightly higher, but still at a 34 month low. Almost all component Indexes in both the manufacturing and service sectors are now below the 50 level, indicating that business activity fell sharply in December.