The extent of the financial crisis is continuing to be shown, with key Asian economies reporting big contractions in Manufacturing PMI data and some plunging to all-time lows.
PMI for South Korea, which is Asia’s fourth-largest economy and is a global manufacturing powerhouse, dropped down to 41.6. It was the lowest reading since January 2009, the financial crisis period. Last week, Korean tech giant Samsung Electronics Co Ltd announced that it is expected to see profits to decline in the current quarter due to a slump in sales.
Elsewhere, another key manufacturer in the sector of high-end technology components, Taiwan, saw its PMI dropping down to 42.2. The number had previously been within expansionary territory up at 50.4 in March.
Over in India, the third-largest economy in Asia, saw its new orders and output shrinking, the steepest pace since 2005. Many factories were also being forced to cut jobs, which was the fastest rate in the history of the survey.
As a recap, last week, Japan’s PMI release fell to an 11-year low. The survey showed that both output and new orders contracted at the fastest pace since early 2009.
What does this mean for the market?
It is something to be further mindful of when markets start paying close attention again to economic data points. For the time being, the focus has not been too much on global recession, right now there are other distractions in the market. Economies easing lockdown measures, in addition to U.S. and China tensions. A tone is trying to be established, following a strong week of risk appetite last week, the latest reports from the U.S. largely slowed down that market optimism for now.
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