Market Update
Chinese markets ended lower in Asia Wednesday after data revealed a continued contraction for the fourth straight month in the country’s manufacturing sector.
The Nikkei closed up 1.1%. The Shanghai Composite declined 0.3% while the Hang Seng fell 1%. The Sensex added 0.5%, closing at a fresh record high 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 10.6% on its debut in Tokyo. Seibu had been delisted a decade ago on falsified shareholder records.
Fanuc was up 0.8% but Hitachi Construction fell 1%. Both companies will announce results later this week.
Fuji Electric closed up 1.2% 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 2.6%. The stock has also gained about 4% in the last five sessions.
Toyota reversed 0.2% after a broker downgrade.
Resona gained 2.5% 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 2.9% and 0.9% each, respectively.
Banks were all lower after the Chinese manufacturing data with ICBC and Bank of China both down 1.7% each. AgBank and Bank of Communications both fell over 2% each while China Construction Bank Corp. dropped 1.7%.
The Sensex closed at a fresh record, led by blue-chip stocks.
L&T led gains, up 2.5%, followed by Gail India, up 1.5%.
BHEL, Tata Steel, M&M, Axis Bank, Airtel, HDFC Bank, Sun Pharma, and Coal India all gained in a range between 1% and 1.4%.
RIL ended 0.2% lower after the company said it is raising $550 million from a consortium of Japanese banks as part of the $8 billion capital expenditure programme it had planned for its petrochemicals business.
Wipro remained weak – its shares ended 1.2% lower - following a weak IT services outlook.
Mining stocks traded mixed in Sydney with index leader BHP Billiton up 0.5% while Fortescue Metals and Atlas Iron sank 1.3% and 3.1% each after a drop in iron-ore spot prices.
Gold digger Newcrest Mining brightened 1% 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 1.2%.