Market Update
Chinese markets were down in Asia Wednesday after data revealed continued contraction for the fourth straight month in the country’s manufacturing sector.
The Nikkei was up 1%. The Shanghai Composite declined 0.3% while the Hang Seng fell 0.9%. The Sensex added 0.5% while the All Ordinaries gained 0.6%.
HSBC's preliminary manufacturing PMI stood at 48.3%, up from the final April reading of 48, but still below 50, signaling continued contraction.
China's central bank said Tuesday it would cut the reserve requirement of rural banks – the latest step in a series of measures aimed at reviving the economy.
In other data in the region, the Australian Bureau of Statistics said consumer price inflation rose less-than-expected in the last quarter to 0.6% from 0.8% in the preceding quarter.
In other news, Bank of Japan Governor Haruhiko Kuroda said the economy is on track to achieve the targeted 2% inflation rate and once reached, support to the fiscal policy will decrease.
Stocks on the Move
Hotel and railway operator Seibu Holdings rose over 5% on its debut in Tokyo. Seibu had been delisted a decade ago on falsified shareholder records.
Fanuc was up a percent but Hitachi Construction fell 1.3%. Both companies will announce results later this week.
Fuji Electric was up 1.41% after a Nikkei newspaper report said the company is set to post forecast beating full-year operating profit.
Bridgestone Corp. extended gains, up a further 2.2%. The stock has also gained about 4% in the last five sessions.
Toyota reversed half a percent after a broker downgrade.
Resona gained 2.7% after New York hedge fund Greenlight Capital said it bought a stake in the regional Japanese bank.
China Mobile fell 2.6% in Hong Kong after the company reported a drop in profit, marking the third straight quarter of profit declines. Rivals China Unicom and China Telecom also fell, down 2.6% and 0.6% each, respectively.
Banks were all lower after the Chinese manufacturing data with ICBC and Bank of China both down 1.5% each. AgBank and Bank of Communications both fell 1.8% each while China Construction Bank Corp. dropped 1.9%.
The Sensex hit a third consecutive record high in early trade Wednesday, led by blue-chip stocks.
Sun Pharma led gains, up 2.4%, followed by L&T, up 2.3%, and Axis Bank, up 2.1%.
BHEL and ONGC were up 1.9% and 1.5% each, respectively. Gail India gained 1.4%.
Wipro remained weak – its shares trading flat - following a weak IT services outlook.
Mining stocks traded mixed in Sydney with index leader BHP Billiton up 0.4% while Fortescue Metals and Atlas Iron sank 1.2% and 2.8% each after a drop in iron-ore spot prices.
Gold digger Newcrest Mining shone 1.3% after saying it expects full-year output around the higher end of its previously issued forecast.
Stockland Corp. retreated half a percent after Asutraland Property said it had rejected an all-share takeover bid from the former valuing it at around 2.43 billion Australian dollars. Australand shares fell about a percent.