HONG KONG- Asian shares wobbled on Wednesday as investors remain cautious about China’s path to reopening its economy after it released disappointing manufacturing data, with China and Hong Kong stocks wiping out strong gains from the previous day.
MSCI’s gauge of Asia Pacific stocks outside Japan was up 0.02 percent, paring earlier losses. At current levels, the index is set to post its biggest monthly gain since April 1999.
Hong Kong’s Hang Seng Index and China’s benchmark CSI300 Index, though, opened down 0.4 percent and 0.3 percent respectively, with China’s factory activity contracting at a faster-than-expected pace in November.
China’s factory activity deepened this month, an official survey showed on Wednesday, weighed down by softening global demand and COVID-19 restrictions.
The losses in Hong Kong and China reversed positive sentiment from Tuesday, when Chinese officials said the country would speed up COVID-19 vaccinations for elderly people.
The vaccination push was seen as crucial to unwinding nearly three years of strict curbs in the world’s second-largest economy that have eroded economic growth, disrupted the lives of millions and sparked unprecedented protests this past weekend.
“Headlines from China regarding COVID restrictions and protests are causing jitters among investors. Although some COVID easing measures are being considered, it may not be enough to prevent further economic disruption,” said Anderson Alves, global macro analyst at ActivTrades.
“Expectations are that as COVID cases continue to rise, restrictions will be re-tightened before year-end, bringing with it more uncertainty over the impact on the economy,” he said in a research note on Wednesday.
Japan’s Nikkei 225 fell 0.55 percent while Australia’s S&P/ASX 200 gained 0.29 percent.
Sentiments globally are of a cautious tone. The S&P 500 closed lower on Tuesday as investors awaited guidance on the US Federal Reserve’s path of interest rate hikes.
