Many Asian markets ended with small gains on Wednesday after data showed Chinese manufacturing activity continued to ease in May, but not slow enough to raise an alarm.
Stocks of several regional companies that depend on Chinese demand advanced, including Australian resource producers and Japanese machinery makers. Hong Kong stocks fell to snap a six-session winning streak, led by a decline in Chinese financial and property shares.
In Japan, the Nikkei 225 average added 25.88 points, or 0.3%, to 9,719.61
Hong Kong’s Hang Seng Index slumped 57.70 points, or 0.2%, to 23,626.40
Chinese property and banking stocks were also broadly weaker in Hong Kong, where ICBC slid 0.3% and China Overseas Land & Investment Ltd. fell 1.2%.
But some stocks also advanced in the wake of the PMI data, with Komatsu Ltd. climbing 1.4% in Tokyo.
Several resource-sector stocks also posted modest gains. BHP Billiton Ltd. and Alumina Ltd. rose 0.4% each in Sydney; Inpex Corp. rose 0.7% in Tokyo
A slowdown in manufacturing activity was observed in other countries in the region as well, with HSBC’s PMI data for South Korea and Taiwan also showing softness during the month. Likewise, a survey by Australian Industry Group PwC found a similar pattern of factory activity in that country.
Among other notable movers in Tokyo NTT DoCoMo Inc. fell 1.1% after Moody’s said the company’s debt was under review for a possible downgrade.
Mizuho Financial Group Inc. fell 1.6% after regulators reportedly told the bank to improve its operations following a computer glitch that closed its ATMs and some other functions earlier this year.
The Sydney market moved sideways before ending flat, clamped down by losses for some banks after data released earlier in the day showed the nation’s economy contracted 1.2% in the March quarter.
Commonwealth Bank of Australia lost 0.5%, and Australia & New Zealand Banking Group Ltd. fell 0.6%.
The dollar was buying 81.37 yen, from ¥81.31 in New York late Tuesday. Among other currencies, the euro traded at $1.4409, from $1.4377 U.S., and ¥117.25 from ¥116.92.
CHINA
Shanghai’s CSI 300 Composite Index inched ahead 2.62 points to 3,004.17
The performance followed an HSBC survey showing the country’s purchasing managers’ index for May eased to a 10-month low of 51.6 from 51.8 in April, while an official PMI gauge also slipped, to 52.0 from 52.9 in April.
A measure above 50 indicates an expansion, and one below implies a contraction.
Hongbin Qu, HSBC’s chief China economist described the data as signaling “just a moderation rather than a meltdown in growth” and that Beijing might pursue more hikes in interest rates and bank reserve requirements in the coming months.
Among the decliners on mainland bourses, Industrial & Commercial Bank of China Ltd. lost 1.8%, while Poly Real Estate Group Co. dropped 0.8% on worries that Beijing might tighten its policy further in coming months. Aluminum Corp. of China Ltd. added 1.2% in Shanghai
The drop in Chinese banks came despite a Reuters report that Chinese regulators planned to shift some two trillion to three trillion yuan ($308 billion to $463 billion U.S.) of debt off the balance sheets of local governments to reduce risks to the mainland economy.
Analysts at Bernstein Research said the report, if true, could be positive for banks as loans made to the local government vehicles were "the biggest risk to the Chinese banks’ credit quality."
In other markets;
Taiwan’s Taiex Index continued its march, gathering 73.51 points, or 0.8%, to 9.062.35
Korea’s Kospi index fell back 1.13 points to 2,141.35
Singapore’s Straits Times Index accumulated 12.94 points, or 0.4%, to 3,172.87
New Zealand’s NZX 50 edged up 6.03 points, or 0.2%, to 3,551.54
Australia’s S&P/ASX 200 gave back one point to 4,707.30
