Asia report: Markets mixed on PMI data, Fed expectations
By Josh White
Date: Thursday 21 Aug 2025
(Sharecast News) - Asian equities were mostly higher on Thursday, with gains led by Australian and Chinese markets as technology stocks steadied after a recent selloff.
Stephen Innes at SPI Asset Management said, "Asian markets walked into Thursday like a card room still heavy with last night's smoke - muted, watchful, waiting for the next cue out of Jackson Hole," noting that futures in Tokyo were "a touch softer, while contracts for China and Australia edged higher, small sparks in an otherwise cautious open."
Regional sentiment improved despite hawkish signals from the Federal Reserve's July meeting minutes, which reinforced a cautious stance on interest rate cuts.
Innes described the minutes as reading "like a séance - inflation's ghost still rattling chains around the table," but added that this was "before the jobs report on 1 August hit the tape with a dull thud, exposing just how quickly the Fed's script can go stale."
S&P 500 futures were flat in Asian trade, with investors awaiting Federal Reserve chair Jerome Powell's speech at the Jackson Hole Symposium later this week.
"Swaps are still pricing September cuts with high conviction," Innes said, "but those wagers now walk into Powell's Jackson Hole stage like gamblers ahead of the dealer - waiting to see whether he throws the dice on easing or doubles down on hawkish resolve."
Markets mixed as investors watch PMI data, US Fed
In Japan, equities underperformed, with the Nikkei 225 falling 0.58% to 42,640.00 and the Topix down 0.52% to 3,082.95.
Losses were driven by Daiichi Sankyo, which slumped 7.18%, while Lasertec and Kanadevia fell 3.07% and 2.81%, respectively.
Chinese stocks advanced as economic recovery hopes and stimulus expectations lifted sentiment.
The Shanghai Composite edged up 0.13% to 3,771.10, with Xinjiang Winka Times Department Store, Anyuan Coal Industry Group, and Beijing Cuiwei Tower all surging by around 10%.
The Shenzhen Component slipped 0.06% to 11,919.76.
Hong Kong's Hang Seng Index fell 0.24% to 25,104.61 as China Resources Power dropped 5.9%, Zhongsheng Group lost 3.64%, and Sunny Optical Technology declined 3.65%.
In South Korea, the Kospi 100 rose 0.11% to 3,179.93, led by Meritz Financial, up 8.32%, Samsung Life, which gained 7.4%, and Doosan Enerbility, up 7.14%.
Australian shares hit record highs, with the S&P/ASX 200 climbing 1.13% to 9,019.10 after upbeat business activity data.
Objective Corp jumped 20.53%, Brambles rose 13.22%, and Super Retail Group gained 12.34%.
New Zealand's S&P/NZX 50 advanced 0.94% to 13,194.07, boosted by Skellerup Holdings, Heartland Group, and Freightways, which gained 6.38%, 4.88%, and 3.73%, respectively.
Innes noted that "tech - the market's glamour trade - is looking fragile," with the Nasdaq 100 logging its second straight decline and the 'Magnificent Seven' chalking up their fourth consecutive drop, "their worst run since April. It isn't panic," he said, "but it feels like the herd is testing the fence."
In currencies, the dollar was last up 0.18% on both the yen to JPY 147.59 and the Aussie to AUD 1.5571, while it inched up 0.01% against the Kiwi to change hands at NZD 1.7175.
"The FX board is trading like a coiled spring - neither dollar bulls nor bears are willing to show full conviction until Powell clears his throat in Wyoming," Innes said.
Oil prices strengthened, with Brent crude futures last up 0.84% on ICE at $67.40, and the NYMEX quote for West Texas Intermediate rising 0.94% to $63.30.
Japan PMI rises, Australia manufacturing growth hastens
In economic news, Japan's flash purchasing managers' index (PMI) data for August showed the composite index edging up to 51.9 from 51.6, signaling improving momentum.
Manufacturing output returned to expansion at 50.5 from 47.6, while the broader manufacturing PMI rose to 49.9 from 48.9.
Services growth slowed slightly, with the index easing to 52.7 from 53.6.
S&P Global's Annabel Fiddes said the upturn was "broad-based, led by a fresh rise in factory production alongside continued service-sector strength," but warned that weak foreign demand and rising input costs were weighing on profitability, with selling price inflation at its lowest since October.
Australia's economy posted its fastest manufacturing growth in nearly three years, as the S&P Global manufacturing PMI climbed to 52.9 in August from 51.3 in July.
The services PMI rose to 55.1 from 54.1, its strongest in 40 months, while the composite PMI increased to 54.9 from 53.8, the highest since April 2022.
Consumer inflation expectations eased to 3.9%, their lowest since March.
India's services sector surged to its highest level on record, with the HSBC India services PMI jumping to 65.6 in August from 60.5 in July.
The expansion was driven by a surge in new business orders, both domestic and export-oriented, spurring the fastest pace of employment growth in months.
Rising wage bills and raw material costs pushed input prices sharply higher, prompting firms to raise charges as demand remained strong. Services providers also reported greater confidence in future activity.
Reporting by Josh White for Sharecast.com.
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