x Abu Dhabi, UAETuesday 25 July 2017

China 'still the main show' in the emerging markets

Markets Update: Emerging market stocks advanced for a fourth day, with price swings in the benchmark index falling to an eight-year low, as a gauge of Chinese manufacturing climbed and Israel agreed to a ceasefire with Hamas.

A Chinese manufacturing index signalled the first expansion in 13 months. Nelson Ching / Bloomberg
A Chinese manufacturing index signalled the first expansion in 13 months. Nelson Ching / Bloomberg

Emerging market stocks advanced for a fourth day, with price swings in the benchmark index falling to an eight-year low, as a gauge of Chinese manufacturing climbed and Israel agreed to a ceasefire with Hamas.

A Chinese manufacturing index signalled the first expansion in 13 months, a survey of purchasing managers showed.

The China report "was better than expected and indicates the economy has possibly begun expanding again", said Christopher Palmer, a director of global emerging markets for Henderson Global Investors. "For most investors China remains the main show."

The preliminary reading was 50.4 for the Chinese purchasing managers' index released by HSBC Holdings and Markit Economics. That compares with a final level of 49.5 for last month. A reading above 50 indicates expansion.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 0.9 per cent to a two-week high.

China's Shanghai Composite Index sank 0.7 per cent, following the benchmark index's biggest gain in three weeks, as waning speculation of lower bank reserve requirements overshadowed the manufacturing gauge increase.

Russia's Micex lost less than 0.1 per cent as crude prices pared gains. Brazil's Bovespa rose, reversing yesterday's losses. South Korea's Kospi index rose 0.8 per cent, its highest close since November 12.

The American markets were closed yesterday for Thanksgiving. Fewer Americans filed applications for unemployment benefits last week as damage to the labour market caused by superstorm Sandy began to subside.

Dubai shares ended the day 0.21 per cent lower, while Abu Dhabi's measure closed unchanged.