China markets rise after private survey shows Chinese factory activity grew; HSBC shares up 5%

SINGAPORE — Mainland China stocks rose along with most other Asia-Pacific indexes on Monday as a private survey on Chinese factory activity showed slight growth. HSBC shares popped after it released its interim results for the second quarter of 2022.

China's Caixin/Markit manufacturing Purchasing Managers' Index for July stood at 50.4, compared with the 51.5 predicted in a Reuters poll. In June, the reading was 51.7.

Still, the reading was better than China's official Purchasing Managers' Index data released over the weekend, which showed a contraction in factory activity.

Mainland China markets gained. The Shanghai Composite was 0.21% higher to close at 3,259.96 and the Shenzhen Component advanced 1.198% to 12,413.87.

PMI readings are sequential and represent month-on-month expansion or contraction. The 50 mark separates growth from decline.

"The contraction in China's official manufacturing PMI to 49.0 in July from 50.2 in June underscores the extent of the uncertainty around growth stemming from a rise in Covid cases, slowing global demand and property market risks," Venkateswaran Lavanya, an economist at Mizuho Bank, wrote in a Monday note.

"The poor start to Q3 further amplifies the risk that China will miss its 2022 GDP growth target of 'around 5.5%.' This against a backdrop of the authorities signaling last week that no big stimulus would be forthcoming even as the country sticks to its 'dynamic zero-Covid' policy," Lavanya wrote.

Hong Kong's Hang Seng index pared earlier losses and rose fractionally to close at 20,165.84 as shares of tech giant Alibaba lost 3.76%. The stock fell more than 5% earlier in the session.

On Friday in the U.S., Alibaba was added to a list of companies at risk of delisting under the Holding Foreign Companies Accountable Act. U.S.-listed shares plunged 11% in the regular trading session.

"Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange," the company said in a statement Monday.

HSBC announced a drop in pre-tax profit to $9.2 billion for the first half of 2022 on Monday, the company said in its interim results media release. That's a $1.7 billion decrease, the bank said.

But it raised its expected return on tangible equity to 12% from 2023, compared with the 10% target in February. Chief Executive Noel Quinn also said the bank plans to revert to quarterly dividends next year and aims to restore the dividend to pre-Covid levels as soon as possible.

Hong Kong-listed shares of HSBC closed 4.96% higher.

Japan's Nikkei 225 gained 0.69% to close at 27,993.35 and the Topix index advanced 1.02% to 1,960.11.

In Australia, the S&P/ASX 200 was 0.69% higher at 6,993.

The Kospi in South Korea was mildly higher at 2,452.25 and the Kosdaq gained 0.5% to 807.61.

MSCI's broadest index of Asia-Pacific shares outside of Japan was 0.21% higher.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.719, lower than last week's levels.

The Japanese yen traded at 132.48 per dollar, stronger than levels seen early last week. The Australian dollar was at $0.7023.

Oil futures slipped. U.S. crude futures fell 0.82% to $97.81 per barrel, while Brent crude dropped 0.24% to $103.72 per barrel.