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Why Are Asian Markets Mixed on July 31?

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China

China’s Shanghai Composite Index lost strength at the end of last week and started this week on a mixed note. On July 31, the Shanghai Composite Index opened lower and gained strength as the day progressed.

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Market sentiment

China’s markets were mixed on July 30. Concerns about the US-China trade war were offset by the government’s decision to increase infrastructure spending. On July 31, the Shanghai Composite Index opened lower following the release of weaker-than-expected factory data. According to the China Logistics Information Centre, China’s manufacturing PMI declined to 51.2 in July—less than analysts’ forecast of 51.4. However, the market regained strength amid the strong performance from energy and real estate stocks.

The market is looking forward to the release of July’s China Caixin manufacturing PMI data. The data are scheduled to be released at 9:45 PM EST today. On July 31, the Shanghai Composite Index rose 0.26% and closed the day at 2,876.40. The SPDR S&P China (GXC) fell 1.07% on Monday.

Hong Kong

Hong Kong’s Hang Seng Index started this week on a weaker note by closing lower on Monday. Carrying forward the weakness, the Hang Seng Index opened lower on Tuesday and declined to one-week low price levels. Caution ahead of central bank meetings this week is weighing on Asian markets. US markets declined overnight amid the extended sell-off in the tech sector, which weighed on the Hang Seng Index.

On July 31, the Hang Seng Index fell 0.69% and closed the day at 28,534.00. The Shares MSCI Hong Kong (EWH) rose 0.16% on Monday.

Japan

After closing lower on Monday, Japan’s Nikkei Index opened lower on July 31 and traded with increased volatility. US markets’ weak performance and increased caution in the market weighed on the Nikkei Index. However, the market regained strength and recovered following the Bank of Japan’s interest rate decision. The Bank of Japan left the interest rates unchanged and announced tweaks to the monetary policy like making the stimulus program more flexible.

The Nikkei Index rose 0.06% and closed the day at 22,558.00. The iShares MSCI Japan (EWJ) fell 0.76% on Monday.

Next, we’ll discuss how US markets performed on July 30.

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