September 20, 2012

Asian markets eased back ahead of China data

HONG KONG: Asian markets fell Thursday after the previous day's impressive gains, while more weak manufacturing figures out of China added to concerns about the economic giant.

Adding to downbeat sentiment in Japan were figures showing the economy recorded its second straight monthly trade deficit in August owing to slipping exports caused by a worldwide slowdown.

Tokyo fell 1.57 percent, or 145.23 points, at 9,086.98, as the yen regained the ground it lost when the Bank of Japan announced a new round of easing on Wednesday.

Seoul lost 0.87 percent, or 17.55 points, at 1,990.33 while Sydney was 0.48 percent, or 21.1 points, lower 4,397.2.

In afternoon trade Shanghai fell 1.28 percent, while Hong Kong was 0.84 percent lower.

Global indices climbed on Wednesday, with Tokyo and Sydney hitting four-month highs, after the Japanese central bank said it would extend an asset-purchase scheme as it tries to jumpstart the domestic economy.

The move followed similar bond-buying plans by the US Federal Reserve and the European Central Bank, which helped send equities soaring.

However, most of those advances were wiped out on Thursday after HSBC's preliminary Purchasing Managers Index (PMI) said Chinese manufacturing activity contracted for an 11th straight month in September.

The survey adds to long-running worries about the world's number-two economy, which has seen its key export sector pummelled by shrinking demand in the crucial European and US markets.

HSBC said the PMI for this month hit 47.8, a mild improvement from a final reading of 47.6 in August. However, a reading below 50 indicates contraction, while anything above 50 shows growth. The final results will be released on September 29.

"The HSBC PMI data didn't offer us a surprise to the upside, so the market will continue to fall," said Soochow Securities analyst Zhu Kaikai.

The figures from China are closely watched as the country is a key driver of growth for much of the global economy.

In forex markets the dollar -- which briefly topped 79.00 yen after the BoJ announcement before easing to 78.36 yen by the end of New York trade -- bought 78.13 yen Thursday in Asia.

The euro was at $1.2986 from $1.3049 and at 101.47 yen from 102.24 yen. It had surged to 103.50 yen at one point after the BoJ move Wednesday.

Japan had a trade deficit of 754.1 billion yen ($9.6 billion) in August, smaller than the year-before deficit of 777.5 billion yen but bigger than the deficit of 518.9 billion yen for July.

"The size of the deficit was within expectations, but it increased from the previous month and underlines the difficult economic environment overseas," said Junko Nishioka, chief economist at RBS Securities Japan, according to Dow Jones Newswires.

On Wall Street Wednesday shares climbed after the National Association of Realtors announced existing home sales across the country leaped 7.8 percent from July to a two-year high, and were up 9.3 percent from a year ago.

The Dow added 0.10 percent, the S&P 500 rose 0.12 percent and the tech-heavy Nasdaq added 0.15 percent.

Oil prices fell, with New York's main contract, light sweet crude for delivery in October, falling 49 cents to $91.41 a barrel and Brent North Sea crude for November delivery shedding 26 cents to $107.93.

Gold was at $1,761.89 at 0625 GMT compared with $1,772.41 on Tuesday.

In other markets:

-- Taipei fell 0.7 percent, or 54.36 points, to 7,727.55.

HTC slid 1.45 percent to Tw$306.0 while TSMC was 0.81 percent lower at Tw$85.3.

-- Wellington was up 0.56 percent, or 21.38 points, at 3,819.28.

Telecom Corp. rose 0.87 percent to NZ$2.33.

By Business Recorder

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