Asian stocks outside Japan dropped for
the first time in nine days after a private gauge of Chinese
manufacturing dropped more than economists predicted.
China Shenhua Energy Co., the nation’s biggest coal producer by market capitalization, declined 2.2 percent in Hong Kong. Gambling firm Tatts Group Ltd. slumped 5.3 percent in Sydney after profit missed estimates. Dainippon Screen Manufacturing Co. jumped 3.9 percent in Tokyo after Mitsubishi UFJ Morgan Stanley Securities Co. advised buying shares of the semiconductor-equipment maker.
The MSCI Asia Pacific excluding Japan Index slid 0.7 percent to 509.25 as of 11:08 a.m. in Hong Kong, with five shares falling for each two that rose. The measure closed yesterday at a more than six-year high.
“China is still in a recovery mode, but the momentum has
slowed,” Wang Tao, a Hong-Kong based head of China economic
research at UBS AG told Bloomberg TV.
“The summer rebound is taking a breath. The recovery is still on track, but it is not that strong.”
The preliminary Purchasing Managers’ Index from HSBC
Holdings Plc and Markit Economics was at 50.3 in August,
trailing all 22 estimates in a Bloomberg News survey of
economists and missing the 51.5 median forecast. The measure
dropped from July’s 51.7 and was at a three-month low. Numbers
above 50 indicate expansion.
Regional Indexes
South Korea’s Kospi index fell 1.2 percent and Hong Kong’s Hang Seng Index lost 0.9 percent. The Hang Seng China Enterprises Index of mainland stocks traded in the city dropped 1.5 percent and the Shanghai Composite Index fell 0.7 percent. Taiwan’s Taiex Index retreated 0.3 percent.
Japan’s Topix index advanced 0.7 percent, while Australia’s S&P/ASX 200 Index (AS51) rose 0.2 percent. New Zealand’s NZX 50 Index gained 0.3 percent. Singapore’s Straits Times Index added 0.1 percent.
The drop in the Chinese manufacturing follows a slump in credit expansion and slowing growth in investment spending in July. While the People’s Bank of China has signaled it will maintain a “prudent” policy stance, any further deterioration this quarter may force a looser setting.
“There’s no question the market was looking for something
better, so that’s disappointing on a one-month basis,” Martin Lakos, a Sydney-based division director at Macquarie Private
Wealth, said by phone.
“We’re not overtly concerned about week-by-week or month-by-month numbers. Holding above 50 is still
expansionary, but probably not necessarily where we’d want it to
be. The longer-term trend on PMIs is still very positive.”
Fed Minutes
The Federal Reserve yesterday released minutes of its July meeting in which officials raised the possibility they may end aggressive stimulus sooner than anticipated while acknowledging continued slack in the jobs market. The Fed is on pace to wind down its monthly bond purchases in October, and intends to keep the benchmark interest rate low for a “considerable time” after that.
Futures on the Standard & Poor’s 500 Index added less than 0.1 percent today after the gauge yesterday rose 0.3 percent to close within two points of a record high.
Traders saw a 52 percent chance the Fed will increase its
benchmark interest rate to at least 0.5 percent by July 2015,
futures contracts showed. That compared with a 48 percent
likelihood the previous day. The rate has been near zero since
December 2008.
