HONG KONG: Asian shares wobbled on Wednesday (Nov 30) as investors remain cautious about China's path to reopening its economy after it released disappointing manufacturing data, with China and Hong Kong stocks wiping out strong gains from the previous day.
MSCI's gauge of Asia Pacific stocks outside Japan was up 0.02 per cent at 0201 GMT, paring earlier losses. At current levels, the index is set to post its biggest monthly gain since April 1999.
Hong Kong's Hang Seng Index and China's benchmark CSI300 Index, though, opened down 0.4 per cent and 0.3 per cent respectively, with China's factory activity contracting at a faster-than-expected pace in November.
China's factory activity deepened this month, an official survey showed on Wednesday, weighed down by softening global demand and COVID-19 restrictions.
The losses in Hong Kong and China reversed positive sentiment from Tuesday, when Chinese officials said the country would speed up COVID-19 vaccinations for elderly people.
The vaccination push was seen as crucial to unwinding nearly three years of strict curbs in the world's second-largest economy that have eroded economic growth, disrupted the lives of millions and sparked unprecedented protests this past weekend.
"Headlines from China regarding COVID-19 restrictions and protests are causing jitters among investors. Although some COVID-19 easing measures are being considered, it may not be enough to prevent further economic disruption," said Anderson Alves, global macro analyst at ActivTrades.
"Expectations are that as COVID-19 cases continue to rise, restrictions will be retightened before year-end, bringing with it more uncertainty over the impact on the economy," he said in a research note on Wednesday.
Japan's Nikkei 225 fell 0.55 per cent while Australia's S&P/ASX 200 gained 0.29 per cent.
Sentiments globally are of a cautious tone. The S&P 500 closed lower on Tuesday as investors awaited guidance on the US Federal Reserve's path of interest rate hikes.
Fed Chair Jerome Powell is scheduled to speak about the economy and labour market at a Brookings Institution event on Wednesday. A series of US data concerning manufacturing, inflation and jobs will also be released this week.
"This week will offer an interesting test for markets as we have a look at the next important data macro data points out of the US, especially the PCE inflation data and the Friday November jobs report," said Redmond Wong, Greater China market strategist at Saxo Markets in Hong Kong.
The US ISM manufacturing survey for the month on Thursday is also expected to slip into contraction, Wong said.
Oil prices continued to rise after a buoyant Tuesday, with US crude up 0.873 per cent to US$78.87 a barrel and Brent up 0.76 per cent to US$83.66 a barrel.
Spot gold rose 0.13 per cent.
In currency markets, the dollar index declined 0.2 per cent.