Asian shares lower after weak China data

Money traders work at computer terminals in Tokyo, Jan. 15, 2014. Markets across Asia fell Thursday, Jan. 23, 2014, after data showed Chinese manufacturing activity shrank in January for the first time in six months. AP PHOTO/SHIZUO KAMBAYASHI

HONG KONG—Markets across Asia fell Thursday after data showed Chinese manufacturing activity shrank in January for the first time in six months.

Regional markets were also given a soft lead from Wall Street, which ended mixed as a below-par corporate earnings season continued.

Tokyo fell 0.79 percent, or 125.07 points, to close at 15,695.89, giving up earlier gains as the downbeat sentiment sent traders into the yen and away from the dollar.

Sydney fell 1.07 percent, or 56.8 points, to 5,263.0. Seoul lost 1.16 percent, or 22.83 points, to close at 1,947.59 on news that South Korean economic growth slowed in the October-December quarter.

Shanghai slipped 0.47 percent, or 9.57 points, to 2,042.18 and Hong Kong fell 1.51 percent, or 348.35 points, to 22,733.90.

Banking giant HSBC said Thursday that preliminary results showed manufacturing activity in China contracted sharply in January, adding to recent concern about the world’s No. 2 economy.

The bank’s early reading on its purchasing managers’ index for this month came in at 49.6, well down from 50.5 in December and its lowest since July. A reading above 50 indicates growth, while anything below signals contraction.

“The PMI figure certainly had an impact on the market, showing there still hasn’t been any improvement in the domestic economy,” Zheshang Securities analyst Zhang Yanbing told AFP.

Most of the bank’s sub-indices were also lower, including key new export orders, the survey found.

HSBC economist Qu Hongbin said in a statement the shrinkage was mostly because of cooling domestic demand and added: “As inflation is not a concern, the policy focus should tilt toward supporting growth” to avoid another economic slowdown as seen in the last quarter of 2013.

Official figures at the start of the week showed the Chinese economy grew 7.7 percent last year—the same as 2012, which was the slowest since 1999. It also showed that expansion in the October-December quarter came in at 7.7 percent, weaker than the 7.8 percent in the previous three months.

Shares in Shanghai got some support from news that China’s central bank had pumped almost $20 billion into the financial system Thursday to ease a liquidity squeeze before the Chinese New Year holiday.

It made a similar move Tuesday, which came a day after the bank said it had provided short-term liquidity to some big commercial lenders to head off a possible credit crunch.

Weak earnings

In forex trade the dollar bought 104.37 yen in Tokyo, down from 104.54 yen in New York Wednesday, while the euro fetched 141.90 yen against 141.57 yen.

The euro was at $1.3600, from $1.3544.

US shares ended mixed as the earnings season failed to inspire. Before releasing their fourth-quarter reports, many companies warned of poor earnings, according to a report by S&P Capital IQ.

Of the 100 firms to give an outlook, 80 were negative, 10 were positive and 10 were in line, said the report. The ratio of negative-to-higher forecasts is higher than the 15-year average, S&P Capital IQ said.

Computer giant IBM sank 3.3 percent after posting disappointing sales in its hardware division during the fourth quarter.

The Dow fell 0.25 percent, but the S&P 500 edged up 0.06 percent and the Nasdaq added 0.41 percent.

Oil prices slipped as investors locked in profits after prices hit their highest levels this year on forecasts of stronger crude demand.

New York’s main contract, West Texas Intermediate for March delivery, was down 10 cents at $96.63 a barrel after rising $1.76 in US trade. Brent crude for March dipped 42 cents to $107.85 following a $1.54 jump late Wednesday.

Gold fetched $1,245.30 at 1115 GMT compared with $1,239.88 late Wednesday.

In other markets:

— Kuala Lumpur lost 0.32 percent, or 5.79 points, to close at 1,808.31.

Palm oil giant Sime Darby shed 0.1 percent to 9.13 ringgit, while utility Tenaga Nasional fell 0.2 percent to 11.50. Petronas Gas gained 0.3 percent to 23.16 ringgit.

— Singapore closed down 1.07 percent, or 33.50 points, to 3,100.24.

Real Estate developer Capitaland lost 1.03 percent to Sg$2.87 while Oversea-Chinese Banking Corporation eased 0.83 percent to Sg$9.57.

— Jakarta climbed 0.41 percent, or 18.55 points, to 4,496.04.

Bank Negara Indonesia gained 1.06 percent to 4,275 rupiah, while miner Aneka Tambang lost 2.34 percent to 1,045 rupiah.

— Bangkok added 1.38 percent, or 17.85 points, to 1,308.34.

Coal producer Banpu gained 4.63 percent to 28.25 baht, while telecoms company True Corporation dropped 4.43 percent to 7.55 baht.

— Taipei fell 0.35 percent, or 30.2 points, to 8,595.1.

Smartphone maker HTC fell 2.76 percent to Tw$141.0 while Hon Hai was 0.36 percent down at Tw$83.9.

— Wellington was down 0.79 percent, or 39.26 points, at 4,911.07.

Fletcher Building eased 0.33 percent to NZ$9.13 while Telecom was 0.71 percent higher at NZ$9.92.

— Manila closed 0.49 percent higher, adding 30.19 points to 6,170.05.

BDO Unibank rose 3.83 percent to 80 pesos, Alliance Global was 2.86 percent higher at 27 pesos and Metropolitan Bank advanced 0.63 percent to 79.80 pesos.

— Mumbai nudged higher 0.17 percent, or 35.99 points, to close at 21,373.66 points.

Indian Hotels rose 3.11 percent to 59.6 rupees while Future Retail lost 4.34 percent to 87.15 rupees.