Market Talk – Thursday, Aug. 6

ASIA:

China’s economic growth indicators are lopsided, pointing to possible downside risks for the country in the second half of 2020 as it tries to recover from the coronavirus pandemic, an analyst said Thursday. Recent data showed China’s June retail sales fell 1.8% from a year ago, much worse than the 0.3% growth analysts forecast in a Reuters poll. That came after a 2.8% drop in May.

The Monetary Policy Committee (MPC) of India’s central bank, the Reserve Bank of India (RBI), has decided to keep the repo rate unchanged at 4%, Governor Shaktikanta Das announced on Thursday. The central bank also allowed lenders to restructure corporate and MSME loans as well as raised the limit of loans that can be availed against gold ornaments and jewelry. “Taking into consideration all factors, the GDP growth in the first half of the year is estimated to remain in the contraction zone. For the year 2020-21 as a whole, real GDP growth is also estimated to be negative,” the RBI Governor said.

India’s dominant services industry, a key driver of economic growth, shrank for a fifth straight month in July as restraining measures to stop the spread of the coronavirus hurt business activity and led to record job cuts, a survey showed. The Nikkei/IHS Services Purchasing Managers’ Index increased to 34.2 in July from 33.7 in June; however, it was still well below the 50-mark separating growth from contraction. July was the fifth straight month the index was sub-50, the longest such stretch since a 10-month run to April 2014.

The major Asian stock markets had a mixed day today:

  • NIKKEI 225 decreased 96.70 points or -0.43% to 22,418.15
  • Shanghai increased 8.90 points or 0.26% to 3,386.46
  • Hang Seng decreased 171.96 points or -0.69% to 24,930.58
  • ASX 200 increased 40.90 points or 0.68% to 6,042.20
  • Kospi increased 30.75 points or 1.33% to 2,342.61
  • SENSEX increased 362.12 points or 0.96% to 38,025.45
  • Nifty50 increased 98.50 points or 0.89% to 11,200.15
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