Asian stocks lower as China data fails to reassure
HONG KONG—Asian markets slipped lower Monday as slightly improved manufacturing data from China failed to dampen fears of a slowdown in the world’s No. 2 economy, as markets took a bearish view.
Tokyo gave up early gains to close down 0.20 percent, Hong Kong finished 1.84 percent lower, Sydney shed 0.32 percent, Seoul closed off 0.10 percent and Shanghai closed down 0.76 percent.
The preliminary HSBC China manufacturing purchasing managers index rose to a two-month high of 49.1 in April compared with a final reading of 48.3 in March.
A reading above 50 indicates expansion, while a reading below 50 suggests contraction.
The move higher “suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown,” HSBC chief economist for China Qu Hongbin said in a statement.
However, “the pace of both output and demand growth remains at a low level in a historical context and the job market is under pressure. This calls for additional easing measures in the coming months,” he added.
The British banking giant’s data mark the sixth straight month the reading remained in contraction.
Shanghai shares closed down 0.76 percent, with investors betting that further stimulus action would not be coming anytime soon.
“The market’s interpretation of today’s PMI figure is that in the short term the Chinese government is not likely to take aggressive stimulus action,” said Zhang Gang, a strategist at Central China Securities.
Shen Jun, an analyst at BOC International, told AFP that despite the improvement, the reading “does not indicate a recovery in the domestic economy.”
China last week announced its economy grew by 8.1 percent in the first three months of 2012, its slowest pace in nearly three years, putting pressure on Beijing to loosen its monetary policy.
On Monday metals shares were lower after gains in previous sessions.
Western Resources dropped 4.12 percent to 19.30 yuan, Jiangxi Copper fell 1.33 percent to 25.26 yuan and aluminium producer Chalco ended down 1.00 percent to 6.93 yuan.
Investors will be watching the Bank of Japan’s policy meeting and the US Fed’s Open Market Committee meeting later this week, both of which could see the announcement of new easing measures.
“There are plenty of data and events this week including central banks in the US, Japan and New Zealand that will capture attention,” Credit Agricole said in a note to clients.
“Political events in France and bond auctions in the eurozone will also provide direction. We continue to see risk aversion creeping higher against this background, which in turn will keep risk assets on the back foot,” it said.
The euro eased against the dollar and yen in Asia as investors digested news that Socialist challenger Francois Hollande had beaten Nicolas Sarkozy in the first round of France’s presidential election.
The euro inched down to $1.3193 and 107.33 yen in Tokyo afternoon trade from $1.3216 and 107.77 yen in New York late Friday.
The dollar fell to 81.34 yen from 81.52 yen.
Hollande has said he would move to renegotiate a fiscal pact agreed on by European leaders late last year, shifting the focus toward growth rather than enforcing austerity measures as a buffer against the eurozone debt crisis.
“There is concern that the policies (Hollande) has been promoting could create friction between other major nations, including Germany,” said Masafumi Yamamoto, chief forex strategist at Barclays Capital in Tokyo.
The IMF raised $430 billion in new funds for crisis intervention Friday, with China and other emerging economic giants taking part despite worries the money will go to more eurozone bailouts.
“We have commitments that are north of $430 billion. That almost doubles the lending capacity of the fund,” IMF managing director Christine Lagarde said after meetings of the IMF and finance chiefs of the Group of 20 economic powers.
It came at a time when worries were mounting that Spain and Italy could founder and require international support following rescues for Portugal, Ireland and Greece.
The Dow climbed 0.50 percent on Friday, the broader S&P 500 was up 0.12 percent but the Nasdaq fell 0.24 percent.
The Fed’s interest rate-setting panel will meet Tuesday and Wednesday to decide whether more stimulus for the spluttering economy is warranted.
While Fed Chairman Ben Bernanke has sounded more positive in recent weeks, high gasoline prices, slowing job growth and Europe’s debt problems have raised fears of another spring stumble.
But faced with a moderate, if uncertain, economic outlook, and good reasons not to push ahead with new stimulus, the Fed is expected to stand pat.
On oil markets, New York’s main contract, light sweet crude for delivery in June shed nine cents to $103.79 while Brent North Sea crude for June delivery rose four cents to $118.80.
Gold was at 1,632.75 an ounce at 1030 GMT, compared with $1,643.62 late Friday.
In other markets:
— Taipei closed down 0.35 percent, or 26.06 points, to 7,481.09.
Hon Hai Precision lost 3.01 percent at Tw$99.9 while leading smartphone maker HTC was 2.38 percent higher at Tw$473.0.
— Manila bucked the trend to close up 0.13 percent, or 6.63 points, to 5,163.09. Top-traded GT Capital Holdings gained 0.04 percent to 492.20 pesos while Megaworld Corp. was up 3.9 percent to 2.13 pesos.
However, Metropolitan Bank and Trust Co. was down 0.55 percent to 90 pesos.
— Wellington was flat, with the NZX-50 edging down 2.78 points, or 0.08 percent, at 3,513.45.
Contact Energy fell 2.25 percent at NZ$4.78 and Telecom Corp. gained 1.8 percent at NZ$2.25.
— Singapore closed down 1.07 percent, or 32.13 points, to 2,962.35.
Vehicle distributor Jardine Cycle and Carriage was down 1.19 percent at Sg$46.70 while Oversea-Chinese Banking Corp. shed 0.90 percent to Sg$8.83.
— Kuala Lumpur shares fell 0.51 percent, or 8.05 points, to end at 1,583.80.
Plantation group Sime Darby lost 1.62 percent to 9.73 ringgit, while telecommunications company Axiata Group Bhd shed 0.93 percent to 5.32. Malayan Banking gained 0.11 percent to 8.86 ringgit.
— Jakarta closed 0.6 percent lower, or 25.88 points, to 4,155.49.
Car maker Astra International slipped 1.5 percent to 72,200 rupiah, gold and nickel miner Aneka Tambang fell 2.3 percent to 1,730 rupiah and cement maker Semen Gresik declined 1.7 percent to 11,750 rupiah.
— Bangkok edged down 0.44 percent, or 5.25 points, to close at 1,189.35.
Banpu lost 1.06 percent to 558 baht, and PTT Plc fell 1.98 percent to 347 baht.
— Mumbai shares fell 277.16 points or 1.60 percent to 17,096.68. India’s largest private aluminium producer Hindalco fell 4.88 percent to 118.9 while Infosys ended down 3.92 percent at 2,311.95.
