Asian stock extend losses on weak China PMI survey; dollar strong

The Flash PMI – an unofficial but influential reading of manufacturing activity – fell from last month’s reading of 47.3 to 47.

Markit’s Purchasing Manufacturer’s Index (PMI) came in at 47.0 for September, the lowest level since March 2009.

A PMI result below 50 indicates the manufacturing sector is contracting, while anything above shows expansion.

“Fiscal expenditures surged in August, pointing to stronger government efforts on the fiscal policy front”, he said.

The report found that an increased pace of contraction in factory output, export orders, overall new orders and employment.

Shanghai Composite Index was 0.9 percent lower at 10:17 a.m. local time and the Hang Seng index dropped 1.9 percent in Hong Kong. The local currency was little changed at 88.67 Australian cents from 88.57 cents, and fell to 4.0080 Chinese yuan from 4.0233 yuan a day earlier.

Sharp losses on Wall Street overnight were quickly reflected in Asian markets on Wednesday, as traders continued to place bets on a United States rate hike occurring before the turn of the year.

Figures for components of the index indicate that manufacturing output also decreased in September at the fastest rate seen in 78 months.

China’s official factory gauge fell to the lowest reading in three years in August.

“As the focus of concern appears to remain squarely on China, global commodity prices resumed their fall”, BNZ’s Kymberly Martin said in a note. A measure of services fared better, as the economy’s new growth drivers help cushion the growth outlook. Alternative indicators, such as data culled from China’s most- used search engine, biggest online outlet and main bank-card network, are signaling stabilisation in the nation’s economy.