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China manufacturing data slows: ASX flat at noon

In June, Chinese manufacturing activity contracted for the third consecutive month, as indicated by an official factory survey. This decline in manufacturing activity reflects a slowdown in China’s economy. Additionally, the value of the onshore yuan, China’s currency, reached its lowest level since November, trading at 7.2615 yuan per dollar.

Chinese authorities have taken measures to curb the depreciation of the yuan. The People’s Bank of China (PBOC) has set stronger-than-expected midpoint rates for the currency, and state banks have been selling dollars both onshore and offshore. These efforts aim to slow down the devaluation of the yuan. However, market analysts believe that the overall economic environment and the PBOC’s easing policy do not provide sufficient support for the yuan.

The Australian dollar, which is often used as a benchmark for the yuan, experienced a slight decrease of 0.12% to 66.08 cents. This decline in the Australian dollar indicates a correlation with the depreciation of the yuan.

At noon, the S&P/ASX 200 is 0.01 per cent lower at 7,194.10.

The SPI futures are pointing to a rise of 6 points.

Best and worst performers

The best-performing sector is Energy, up 0.74 per cent. The worst-performing sector is REITs, down 0.63 per cent.

The best-performing large cap is Yancoal Australia (ASX:YAL), trading 1.56 per cent higher at $4.57. It is followed by shares in Worley (ASX:WOR) and Newcrest Mining (ASX:NCM).

The worst-performing large cap is Treasury Wine Estates (ASX:TWE), trading 1.23 per cent lower at $11.25. It is followed by shares in Pro Medicus (ASX:PME) and Sonic Healthcare (ASX:SHL).

Asian markets

Asia-Pacific markets were mixed on the final trading day of the first half of the year.

Mainland China markets rose, with the Shanghai Composite and the Shenzhen Component gaining 0.43% and 0.44%, respectively. Factory activity data in China contracted for a third straight month, according to the National Bureau of Statistics release. Hong
Kong’s Hang Seng index fell 0.1%.

Japanese stocks fell as investors digested Tokyo’s core consumer price index, which remained at levels above the central bank’s target for thirteen straight months.

The Nikkei 225 fell 0.5% and the Topix slid 0.8%. In South Korea, the Kospi rose 0.2% while the Kosdaq was fractionally lower. Australia’s S&P/ASX 200 gained 0.14%.

Company news

Blue Star Helium (ASX:BNL, OTCQB:BSNLF) has entered into an agreement with IACX Energy. Under the agreement, IACX will supply and operate a helium plant for the provision of helium recovery services. Blue Star will pay a monthly fee. MD and CEO Trent Spry commented: “As well as delivering significant de-risking benefits in terms of upfront capital… adopting this pathway has also eliminated any requirement for Blue Star to commit to price concession offtake agreements. The result is that we can target the premium pricing available in short-term US contract markets and spot sales.” Shares are trading 38.1 per cent higher at 2.9 cents.

Magnis Energy Technologies (ASX:MNS; OTCQX:MNSEF; FSE:U1P) has executed a Letter of Intent for Phase 1 of its anode active materials commercialisation facility in the US. Con Hoursalas, Group Communications Manager, commented: “The selection of a suitable site holds great significance as it is a milestone in satisfying our customer’s agreement announced in February this year. We look forward with excitement in sharing further details in our next update.” Shares are trading 1.85 per cent lower at 13.3 cents.

Downer EDI (ASX:DOW) has secured a $4.6 billion agreement with the Queensland government for its train production initiative. Chief executive Peter Tompkins said, “Our industry-leading engineering and maintenance practices will be applied in the delivery of the next generation of Queensland’s passenger train fleet.” Shares are trading 2.92 per cent higher at $4.06.

Commodities and the dollar

Gold is trading at US$1782.70 an ounce.
One Australian dollar is buying 66.15 US cents.