Most major Asian markets ended lower Wednesday after mixed signals from China's purchasing managers' index (PMI) surveys and better-than-expected Australian economic growth.
In Japan, the Nikkei 225 gave back 279.25 points, or 1.6%, to 16,955.73, likely weighed by the yen taking a leg higher and after media reports confirmed that Prime Minister Shinzo Abe is likely to announce a delay to a sales tax hike planned for next year until 2019.
While the news was largely expected, it may rekindle concerns about Japan's ability to handle its government debt load, which tops 200% of GDP.
The U.S. dollar was fetching 109.85 yen, with the dollar-yen currency pair down from levels over 111 on Tuesday.
In Hong Kong, the Hang Seng index lost 54.11 points, or 0.3%, to 20,760.98
Aircraft leasing company BOC Aviation was trading at 42.05 Hong Kong dollars on its trading debut in Hong Kong, just a tad above an initial public offering (IPO) price of HK$42, after giving up gains of as much as 4.4% earlier in the day. The IPO of the Bank of China subsidiary raised $1.1 billion U.S. and counted sovereign wealth fund CIC and Boeing as investors.
Australia's gross domestic product (GDP) came in well above expectations, rising 3.1% on-year in the first quarter, compared with a poll which forecast for 2.8% growth.
That sent the Australian dollar surging to as high as $0.7299 U.S. from around $0.7230 before the data. The Aussie was fetching $0.7267 U.S.
Australia's stocks initially trimmed losses after the data, but never turned positive. Most sub-indexes remained in the red. The heavily weighted financial sub-index dropped 1.1% while the energy sector fell 1.8%
While the growth data initially spurred expectations that the Reserve Bank of Australia might hold back any interest rate cuts, some analysts said that with inflation remaining low and much of the growth driven by exports, rate cuts from the current record low 1.5% may still be on the cards.
Virgin Australia tacked on 1.7%, extending Tuesday's 7.1% jump after it announced that China's HNA Aviation would buy a 13% stake in the Australian airline for A$159 million ($114 million U.S.). The Australia-China airline alliance aimed to capitalize on the growing tourism market between the two countries
In South Korea, the Kospi ended flat, likely getting support from a 3.2% gain in heavily weighted Samsung Electronics.
Shares of Japan's Softbank bucked the market, rising 0.4% after news it planned to sell $7.9 billion U.S. worth of U.S.-listed Alibaba shares to improve its leverage ratio, cutting its stake to around 28% from around 32%.
In Japan, exporters were mostly lower in the wake of a stronger yen, which weighs on overseas earnings when they are translated back into the home currency.
Sony shed 0.9%, Honda was down 2.3% and Panasonic was off 2%.
Energy shares around the region lost ground after oil prices failed to hold levels above $50.00 U.S. a barrel. In Australia, Woodside fell 1.8%, while Japan's Inpex shed 1.6%
CHINA
The CSI 300 Index slipped 9.01 points, or 0.3%, to 3,160.55.
Markets didn't get much impetus in either direction from China PMI data.
The official PMI, which focuses on larger companies, came in at 50.1 for May, steady with April's level and a tick above a Reuters poll forecast for 50.0. Levels above 50 indicate expansion.
The official non-manufacturing PMI, which measures services, slipped to 53.1in May from April's 53.5. The services sector now accounts for more than half of China's GDP.
In other markets
In Korea, the Kospi Index dropped 0.68 points to 1,982.72
In Singapore, the Straits Times Index shed 0.52 points to 2,790.54
In Taiwan, the Taiex Index regained 61.57 points, or 0.7%, to 8,597.16
New Zealand’s NZX 50 fell 17.02 points, or 0.2%, to 7,022.40
The ASX 200 fell 55.39 points, or 1%, to 5,323.17
