Asian shares mixed as China factory surveys show modest improvement; Hang Seng jumps

Asian stock markets were mixed Monday as investors digested modestly improved Chinese factory readings and awaited implications of a U.S. appeals court ruling on emergency tariffs.

Hong Kong's Hang Seng rose about 2% to 25,573.58, while the Shanghai Composite added 0.3% to 3,869.96 after two surveys showed a small improvement in Chinese manufacturing activity in August. A government purchasing managers index (PMI) ticked up to 49.4 from 49.3 in July, and a private-sector gauge put the general PMI at 49.9, up from 49.4 the prior month. Both measures remain just below the 50 threshold that separates expansion from contraction.

"Traders on the floor of a Hong Kong exchange" (ABC News)

The surveys suggest China's manufacturing sector is under continued pressure but showing resilience amid elevated U.S. tariffs. Investors are also watching legal and policy developments in the United States after the U.S. Court of Appeals for the Federal Circuit ruled Friday that President Donald Trump overstepped his authority when he invoked national emergency powers to impose sweeping import taxes. Market participants said the decision could affect how broadly the U.S. executive branch can apply tariffs, with potential implications for global trade flows and corporate costs.

Analysts noted that the modest PMI gains do not yet signal an outright recovery in factory output, but they do indicate a stabilization after months of weakness. The government and private surveys both remained below the expansion cutoff, reflecting ongoing headwinds including weaker global demand and tariff-related uncertainty. China and the United States continue negotiations on a wide-ranging trade agreement, which will be a key factor in determining future import duties for companies and consumers.

Elsewhere in the region, markets showed a mix of movement as investors balanced risk sentiment from trade and legal developments with signs of durability in parts of China's economy. Observers said further economic data and updates on the U.S.-China talks, as well as any follow-up action from U.S. policymakers in response to the court ruling, will be closely watched for their effects on equities and trade-sensitive sectors.

The near-term outlook depends on whether manufacturing indicators continue to improve and how trade negotiations and legal rulings reshape tariff policy. For now, the small upticks in PMI readings underscore a fragile recovery in Chinese factories while highlighting the persistence of downside risks tied to global trade tensions.