Live News Update: Hundreds evacuated due to wildfires in China’s drought-stricken Chongqing

Live News Update: Hundreds evacuated due to wildfires in China’s drought-stricken Chongqing

The growth of factory production in Japan reached the lowest level in the last 19 months

Au Jibun Bank’s manufacturing PMI fell to 51.0 in August from 52.1 in July © Reuters

Japan’s factory growth slowed to its lowest level since January 2021 as manufacturers were hit by weakening global demand, rising costs and continued coronavirus outbreaks.

Au Jibun Bank’s purchasing managers’ index for Japan’s manufacturing sector fell to 51.0 in August from 52.1 in July, preliminary readings showed.

New orders fell at the fastest pace in nearly two years. Usamah Bhatti, economist at S&P Global Market Intelligence, said this was particularly worrying and pointed to further weakness to come.

However, he added that there was a positive sign in the data, with the rate of input cost inflation decreasing.

The services PMI fell to 49.2 from 50.3, decreasing for the first time since March. A reading below 50 for the index, which measures business activity, represents a contraction.

Darren Tay, Japan analyst at Capital Economics, said the sector was still “bearing the brunt”. record rates Covid-19 infection in Japan.

Hundreds of people have been evacuated due to forest fires in China’s drought-stricken Chongqing

Live News Update: Hundreds evacuated due to wildfires in China’s drought-stricken Chongqing

The central pier of the Qianximen Bridge stands exposed on the bed of the Jialing River, a tributary of the Yangtze, in Chongqing last week © Thomas Peter/Reuters

More than 1,500 people have been evacuated after wildfires hit southwest China’s Chongqing municipality, which is in the midst of a record heat wave and devastating drought.

According to the authorities, the fires engulfed at least four districts in the municipality, and 5,000 rescuers were sent to help. Chongqing, which has a population of over 30 million, is the largest financial center in southwest China.

A months-long heat wave sent Chengdu to a high of 43.4C on Sunday, and the drought has drained rivers and dams in neighboring Hubei and Sichuan provinces, which rely on hydroelectric power.

Officials in Sichuan have extended an order for industrial power users, including lithium battery and solar panel makers, to shut down their power plants until at least Aug. 25 to conserve energy.

What to watch in Asia today

economy: S&P Global and IHS Markit release data on manufacturing sector strength in Japan and other regions, due to supply chain disruptions continue to stifle production around the world.

Corporate results: Chinese e-commerce group reports second quarter results, four months after founder Richard Liu resigned as CEO and became the latest entrepreneur to step down amid Beijing’s campaign to rein in the tech industry. Social media app Kuaishou, a competitor to TikTok in China, also reports results for the quarter to June.

Markets: Asian stocks had a mixed opening, with futures for Hong Kong’s Hang Seng index up but Japan’s Topix and Australia’s ASX down. Globally, stocks fell on Monday on concerns that central bank officials will adopt a hawkish tone at this week’s summit, with US stocks suffering their the biggest drop in the last two months.

Elon Musk is challenging Twitter co-founder Jack Dorsey to a takeover battle

Live News Update: Hundreds evacuated due to wildfires in China’s drought-stricken Chongqing

Jack Dorsey, pictured, previously described Elon Musk as “the only solution I believe in” to solve Twitter’s problems © AFP via Getty Images

Elon Musk has called out Twitter co-founder Jack Dorsey over his communications with the social network’s executives regarding the proliferation of fake or bot accounts on the platform.

Submitting on Monday comes as part of it Musk’s legal battle to back out of its $44 billion deal to buy the company, primarily over what Tesla’s CEO claims is a misrepresentation of the number of active Twitter users.

Dorsey, who resigned as CEO of Twitter in November, was enthusiastic supporter Musk’s dramatic takeover bids. In April, he described Musk as “the only solution I believe in” to solve Twitter’s problems, adding: “I believe in his mission to spread the light of consciousness.”

Monday’s filing seeks any communications between Dorsey and his executives since Jan. 1, 2019, that may be relevant to “the influence or effect of fraudulent or unsolicited orders on Twitter’s business and business”.

The latest request follows efforts by both sides in the legal dispute to gather tidbits of information from dozens of people about the deal as the matter goes to trial in Delaware Court. It is expected to start on October 17 and last for five days.

Read more about the legal battle here.

US stocks fell more than 2% in their biggest decline in two months

U.S. stocks suffered their biggest drop in two months on Monday, as technology shares fell sharply on worries about a bleak economic outlook and concerns that members of the Federal Reserve will adopt a hawkish tone at a symposium this week.

Wall Street’s benchmark S&P 500 fell 2.1 percent, its biggest one-day drop since mid-June. Declines were seen across all sectors, but technology stocks and consumer cyclicals, including Amazon and Tesla, were the hardest hit. The technology-dominated Nasdaq Composite fell 2.5 percent.

Technology stocks that promise long-term growth are considered particularly vulnerable to rising interest rates because higher rates reduce the relative value of earnings far into the future.

While the stock market’s slide on Monday appeared to belie the strong gains so far in the third quarter, investors cautioned that earlier gains were not evidence of increased investor optimism after a dismal start to the year.

Fed Chairman Jay Powell is expected to reaffirm his commitment to aggressive rate hikes at the central bank’s annual meeting in Jackson Hole, Wyoming this week.

Read more about daily market movements here.

Saudi Arabia warns that Opec+ may cut oil production if prices continue to fall

Saudi Prince Abdulaziz bin Salman said Opec+ has “the ability to cut production at any time and in different ways” © Maxim Shemetov/Reuters

Saudi Arabia has warned that it may decide to lead the Opec+ group in cutting oil production if prices continue to fall, arguing that prices have become disconnected from market fundamentals.

Prince Abdulaziz bin Salman, the Saudi energy minister, told Bloomberg that Opec+ has “the ability to cut production at any time and in various ways,” with crude prices falling from nearly $120 a barrel in June to around $95 per barrel.

“The paper oil market has fallen into a vicious cycle consisting of severe liquidity weakness and market fluctuations that limit major market functions. . . (to) effectively achieve the correct and appropriate price,” Prince Abdulaziz said, according to a transcript published in Arabic by the official Saudi News Agency.

“The negative cycle is compounded by unsubstantiated claims that there is a drop in demand and repeated news of a large amount of supply in the market. Paper and physical markets are increasingly separated.”

Many countries have welcomed the drop in oil prices, including the US, where President Joe Biden has made it a pillar of his campaign ahead of November’s midterm elections. Biden traveled to Saudi Arabia earlier this summer, in part to encourage Saudi Arabia to increase oil production to help keep prices under control following Russia’s invasion of Ukraine.

Prince Abdulaziz’s comments suggest Saudi Arabia is unhappy with the latest drop in oil prices. It has long argued that more investment is needed in the energy sector to meet rising global demand and warned that there is little spare capacity if Russian supplies fall sharply under Western sanctions.

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