China Shares Soar as Factory Activity Expands; Australia Tumbles as Government Imposes New Restrictions

by Warrior2

Shares in Australia tumbled nearly 1.5% in reaction to the news that the country will ring in the new year with harsher restrictions.

The major Asia-Pacific stock indexes were mixed on Thursday with some closing early and others not opening at all. Markets in Japan and South Korea were closed for a holiday, while markets in Australia, Singapore and Hong Kong closed earlier than usual due to New Year’s Eve. In China, it was business as usual.

In the cash market on Thursday, China’s Shanghai Index settled at 3473.07, up 58.62 or +1.72%. Hong Kong’s Hang Seng Index finished at 27231.13, up 84.02 or +0.31% and Australia’s S&P/ASX 200 Index closed at 6587.10, down 95.30 or -1.43%.

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EU Agrees to Investment Deal with China to Rebalance Ties

The European Union and China agreed on Wednesday to an investment deal that will give European companies greater access to Chinese markets and help redress what Europe see as unbalanced economic ties.

The agreement was negotiated for near seven years and is likely to take at least another year to enter into force. It forms part of a new relationship with China, which the EU views as both a partner and a systemic rival.

European Commission President Ursula von der Leyen called the agreement an important landmark in the EU’s relationship with China.

Hosuk Lee-Makiyama, director of trade think tank ECIPE, said that although there was little obvious benefit for Beijing in the text, China would not have signed up without some promise of advantage.

“No major power, not least China, gives anything for free, so there will be a trade-off. It’s just not in the agreement,” he said.Advertisement

China’s Factory Activity Expands at Slower Pace in December

China’s factory activity expanded in December but at a slower pace, as the country leads a pack of major economies emerging from the coronavirus slump.

The official manufacturing Purchasing Manager’s Index (PMI) fell to 51.9 in December from 52.1 in November, data from the National Bureau of Statistics (NBS) showed on Thursday, remaining above the 50-point mark that separates growth from contraction.

Analysts had expected it to fall slightly to 52.0.

Australian Shares Fall as Country Rings in New Year with Stricter COVID-19 Restrictions

Shares in Australia tumbled nearly 1.5% on the last day of trading in 2020 in reaction to the news that the country will ring in the new year with harsher restrictions on movement, gatherings and internal borders as the country’s two largest states battle to quash fresh COVID-19 cases in their capital cities.

Australia’s second-most populous state, Victoria, will limit indoor gatherings to 15 people and reintroduce mandatory masks indoors starting Thursday, a day after it reported three new cases that ended its COVID-free streak of more than two months.

Though cases slightly eased in the most populous state of New South Wales (NSW), authorities described the situation as “very volatile”

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