China, SMEs disappointing pushes downward share globally – Reuters Italy

TOKYO / SINGAPORE (Reuters) – Concerns a slowdown in the Chinese economy have intensified after a survey showed that the industrial sector has reported a more pronounced over the last six and a half years in August, ballasting the Stock markets and commodities globally.

The Shanghai Stock Exchange closed falling by 4.3% and the other major Asian stocks closed in negative territory. European shares opened lower.

In China, the preliminary estimate of ‘PMI manufacturing by Markit, which monitors the activity of enterprises of larger size, has shown a drop to 47.1 in August from 47.8 in July, while the median expectations of analysts was for a decline more marginally to 47.7.

This is the sixth consecutive monthly reading below 50 points, threshold watershed between growth and contraction.

If you look at the data in more detail, we see that all the components have deteriorated. Industrial production fell to its lowest in four years, and orders fell at a rate higher than in July.

The disappointing data drove investors toward safe haven assets like gold and bonds, fearing that the Chinese slowdown could have an impact on the global economy.

The markets have already suffered a significant effect of the devaluation of the yuan surprise last week and the sharp fall in its main stock index in early summer.

“The uncertainty on the rise of China is now the main factor moving markets, “says Tim Condon, an economist at ING in Singapore. “Today’s figures reinforce the doubts about global growth,” he added.

The downward trend of China is getting nervous neighboring economies and pushing many Western companies to reduce investment and look for ways to cut costs. More …