Hong Kong stocks fall 2%, private survey shows China’s services activity jump

China’s service sector showed a rebound in the first month of 2023, according to the Caixin/S&P Global services purchasing managers’ index (PMI).

The reading rose to 52.9 in January, above the 50-mark that separates growth from contraction — from the business activity index of 48 seen in December.

Overall new business increased for the first time in five months, the release said, adding that a rise in new work was supported by higher customer numbers alongside the lifting of Covid restrictions in the nation.

Business confidence also improved to the highest level since February 2011, the release said.

“Although Covid infections remained high, an easing of related containment measures stimulated supply and demand in the sector,” Wang Zhe, senior economist at Caixin Insight Group said.

“Lifted travel restrictions also boosted services exports, with the reading for new export orders climbing into expansionary territory.”

— Jihye Lee

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China is the world’s largest online game market, and it’s growing at a rapid pace, according to Goldman Sachs. The investment bank named a Chinese tech giant it thinks is well-placed to cash in on the sector’s growth.

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The Hong Kong economy’s private sector returned to growth in January, the S&P Global purchasing manager’s index showed.

The reading came in at 51.2, marking the first print above the 50-mark that separates growth from contraction since August 2022.

The economy’s business confidence also hit a record high, S&P said in its release.

“Demand for Hong Kong SAR goods and services notably saw a renewed increase, boosting stronger business activity expansion, input acquisition and hiring within the private sector,” said Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence.

“The surge in business confidence to a survey record high further outlined the expectation for better near-term performance,” Pan said.

— Jihye Lee

The au Jibun Bank Japan services purchasing managers’ index came in at 52.3 for the month of January, ticking higher than the previous reading of 51.1 seen in December.

A PMI reading above 50 indicates expansion, while a lower number signals contraction.

The latest report showed faster rises in activity and new orders as the nation sees a continued recovery post-Covid in January.

The rate of input cost inflation quickened for the second straight month in January and remains among the steepest on record, it said in its release.

Elevated levels of inflation could indicate less optimism for Japan’s economy, it said.

“Cost pressures also remained elevated, largely due to higher fuel costs — These developments, and the limit they may place on growth, meant that companies were slightly less bullish about the outlook than they have been recently,” Andrew Harker, economics director at S&P Global Market Intelligence said.

— Jihye Lee

The number of first-time filers for unemployment benefits was smaller than expected, according to U.S. government data. Initial weekly jobless claims came in at 183,000, while economists polled by Dow Jones expected a print of 195,000. The data comes a day before the Labor Department releases its monthly nonfarm report, which is expected to show the economy added 187,000 jobs in January.

— Fred Imbert

Meta’s shares are up more than 19% in after hours trading after the company’s earnings beat Wall Street expectations on revenue and included an announcement of a $40 billion stock buyback. The company also gave a guidance for its first quarter that signaled revenue could rise on the year.

The solid quarterly performance was a surprise for Gene Munster of Deepwater Management, but signal’s that the Facebook parent is getting back on track, he said on CNBC’s “Fast Money.”

“The results essentially put investors at ease, and what investors need to know is that Facebook Meta is getting back on their footing,” Munster said.

He said the company showed solid daily average users especially in key markets, which is a good thing.

“This allows investors to look at the path forward here,” Munster said. He added that the top concerns outlined at the top of the earnings call show that the company is refocusing on what it needs to do to grow.

The S&P 500 closed higher Thursday after rising to its best level in five months. The broader market index jumped 1.47%, while the tech-heavy Nasdaq Composite advanced 3.25%.

Meanwhile, the Dow Jones Industrial Average underperformed, falling 39.02 points, or 0.11%.

— Sarah Min