The many analysts who are arguing that the current slowdown in the Chinese economy is more severe than Beijing wants to let on have a new exhibit A these days: the burgeoning nation’s suddenly stingy power consumption.
China’s manufacturing data recovered somewhat in July, climbing to a five-month high of 49.5 compared to 48.2 for the previous reading in June and giving nervous emerging markets a bit of confidence that not everything in the global economy is bad.
Asian markets moved lower during the overnight session led by Japanese utilities and financials. One bright spot was Hong Kong’s telecom sector, which rallied strongly enough to allow the Hang Seng Index to close higher by 0.42%.
The overnight Asian session saw equities jumping higher across the board led by the tech sector and better than expected U.S. housing starts.
Overnight markets gave back most of their gains as sentiment darkened. Hopes for a new round of quantitative easing to spur growth quickly faded after Federal Reserve Chairman Ben Bernanke’s written statement did not contain a clear path to QE3.
Overnight markets were in the green across Asia, led by Hong Kong’s Hang Seng Index by 1.75% while the others did trade with some cautionary sentiment. Market participants are focused today on Fed Chairman Ben Bernanke’s Congressional testimony for any clues toward QE3, and any indication the Chinese government may begin monetary easing.