Market Talk – Monday, June 1

ASIA:

China’s official manufacturing PMI for May came in at 50.6, according to the country’s National Bureau of Statistics. A private survey released Monday also showed manufacturing activity in China unexpectedly expanding in May, with the Caixin/Markit manufacturing PMI coming in at 50.7 for that month. PMI readings above 50 signify expansion, while figures below the level represent contraction. Economists predict that among other markets in Asia, Vietnam and Taiwan could pull off a similar economic recovery.

China on Monday said that the overall situation at the border with India was “stable and controllable” and both the countries have “unimpeded” communication channels to resolve the issues through dialogue and consultations.

Indian states on Sunday began identifying high-risk zones where coronavirus lockdowns should continue while the rest of country gears up to reopen in June despite a record rise in COVID-19 cases, officials said. The central government has extended lockdown until June 30 in so-called containment zones that should remain under lockdown because they continue to report a high number of infections. But restaurants, malls, and religious buildings are permitted to reopen elsewhere from June 8 as India loosens the world’s longest lockdown to curb the spread of the pandemic. India has reported 182,000 confirmed COVID-19 cases, with 5,164 deaths.

Moody’s Investor Service on Monday downgraded India’s sovereign credit rating for the first time in more than two decades. Downgrading India’s rating by a notch to ‘Baa3’ from ‘Baa2’ assigned in November 2018, Moody’s estimated India’s GDP to shrink by 4%, first full fiscal contraction in more than four decades.

Apple Inc. is set to reopen its biggest stores in Japan from midday on Wednesday, bringing its physical retail network back online in one of its biggest markets. Japan has weathered the COVID-19 pandemic better than most countries, lifting its state of emergency in stages last month and bringing students in Tokyo back to school at the start of this week.

Singapore Airlines reported its first annual net loss of S$212 million in its 48-year history, after COVID-19 crippled travel demand. This compares with a S$683 million profit in the previous year. From Tuesday, travelers will be able to transit through Changi Airport, as Singapore gradually emerges from an almost two-month-long “circuit breaker” period.

The major Asian stock markets had a green day today:

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