Asian stocks fall amid China concerns

Reported by AAP
Monday, April 23, 2012
Topics in this article:
Bougainville Copper Limited,Hostech Limited,Imf (Australia) Ltd

Currency Converter

Mark BourisMyths bustedHome loans can seem a bit complicated and overwhelming. But it doesn't have to be. Mark Bouris clears up some common misconceptions.

Asian markets have slipped lower as slightly improved manufacturing data from China failed to dampen fears of a slowdown in the world's number two economy.

Tokyo gave up early gains to close down 0.2 per cent, Hong Kong finished 1.84 per cent lower, Sydney shed 0.32 per cent, Seoul closed off 0.1 per cent and Shanghai closed down 0.76 per cent.

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 per cent, 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 per cent 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 per cent to 19.30 yuan, Jiangxi Copper fell 1.33 per cent to 25.26 yuan and aluminium producer Chalco ended down one per cent 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 Y107.33 in Tokyo afternoon trade from $1.3216 and Y107.77 in New York late on Friday.

The dollar fell to 81.34 yen from Y81.52.

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 $US430 billion ($A415.80 billion) in new funds for crisis intervention on 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 0.5 per cent on Friday, the broader S&P 500 was up 0.12 per cent but the Nasdaq fell 0.24 per cent.

The Fed's interest rate-setting panel will meet on 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 petrol prices, slowing job growth and Europe's debt problems have raised fears of another spring stumble.

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 US$1,632.75 an ounce at ,1030 GMT (2030 AEST) compared with $1,643.62 late ON Friday.

In other markets:

- Taipei closed down 0.35 per cent, or 26.06 points, to 7,481.09.

Hon Hai Precision lost 3.01 per cent at Tw$99.9 while leading smartphone maker HTC was 2.38 per cent higher at Tw$473.0.

- Manila bucked the trend to close up 0.13 per cent, or 6.63 points, to 5,163.09. Top-traded GT Capital Holdings gained 0.04 per cent to 492.20 pesos while Megaworld Corp. was up 3.9 per cent to 2.13 pesos.

However, Metropolitan Bank and Trust Co was down 0.55 per cent to 90 pesos.

- Wellington was flat, with the NZX-50 edging down 2.78 points or 0.08 per cent at 3,513.45.

Contact Energy fell 2.25 per cent at NZ$4.78 and Telecom Corp gained 1.8 per cent at NZ$2.25.

- Singapore closed down 1.07 per cent, or 32.13 points, to 2,962.35.

Vehicle distributor Jardine Cycle and Carriage was down 1.19 per cent at Sg$46.70 while Oversea-Chinese Banking Corp shed 0.90 per cent to Sg$8.83.

- Kuala Lumpur shares fell 0.51 per cent, or 8.05 points, to end at 1,583.80.

Plantation group Sime Darby lost 1.62 per cent to 9.73 ringgit, while telecommunications company Axiata Group Bhd shed 0.93 per cent to 5.32. Malayan Banking gained 0.11 per cent to 8.86 ringgit.

- Jakarta closed 0.6 per cent lower, or 25.88 points, to 4,155.49.

Car maker Astra International slipped 1.5 per cent to 72,200 rupiah, gold and nickel miner Aneka Tambang fell 2.3 per cent to 1,730 rupiah and cement maker Semen Gresik declined 1.7 per cent to 11,750 rupiah.

- Bangkok edged down 0.44 per cent, or 5.25 points, to close at 1,189.35.

Banpu lost 1.06 per cent to 558.00 baht, and PTT Plc fell 1.98 per cent to 347.00 baht.

- Mumbai shares fell 277.16 points or 1.60 per cent to 17,096.68.

India's largest private aluminium producer Hindalco fell 4.88 per cent to 118.9 while Infosys ended down 3.92 per cent at 2,311.95.

Keep reading - next article
29/07/2014 08:29Sydney, Australia. 29 July,2014
advertisement