Asian shares extend fall after China flash PMI
UPDATED @ 12:00:54 PM 20-09-2012
TOKYO, Sept 20 — Asian shares extended losses today after data indicated little respite for Chinese manufacturers, suggesting growth in the world’s second-largest economy slowed further in the third quarter.
The MSCI’s broadest index of Asia-Pacific shares outside Japan extended losses to be down 0.7 per cent on the day after the HSBC flash purchasing managers’ index was released. It had been down 0.5 per cent before the data.
Australian shares were down 0.5 per cent and the Australian dollar slipped to US$1.0432 from around US$1.0456 before the data.
Hong Kong and Shanghai shares briefly extending losses after the PMI was published, although they picked up again. The indexes were down 0.5 per cent and 1.06 per cent respectively on the day, little changed from levels before the PMI was released.
The HSBC flash PMI ticked up to 47.8 in September from a nine-month low in August of 47.6. Since the index remained below 50, it indicated the sector was still contracting. An output index hit its lowest level in 10 months.
“This is a sign the slowdown in Chinese manufacturing activity is halting and stabilising,” said Hirokazu Yuihama, a senior strategist at Daiwa Securities.
“Market reactions may suggest they want to see some sort of steps to support the economy from authorities, which are seen as slow to take action,” he said.
The data underlined expectations that growth in the world’s second-biggest economy probably eased for the seventh straight quarter in the third quarter. It reinforced concerns of softening demand from the world’s top consumer of many raw materials, weighing on risk sentiment broadly.
The Nikkei stock average fell 0.7 per cent after jumping to a 4-1/2 month high yesterday.
European shares gained yesterday after the Bank of Japan launched fresh stimulus to support its economy following last week’s aggressive easing by the US Federal Reserve, while US stocks edged up on data showing sales of existing US homes rose in August at their fastest rate in more than two years.
But investors have become wary of the uncertainty over whether highly indebted Spain will seek a financial bailout to ease its fiscal strains.
The euro fell 0.3 per cent to US$1.3016, nearing yesterday’s low of US$1.29931, while the dollar slipped to 78.31 yen, backing up from a one-month high of 79.23 yesterday after the BOJ’s stimulus measure.
Reflecting improved market sentiment after central bank measures to support economies, the CBOE Volatility index, a gauge of expected volatility in the Standard & Poor’s 500 index, fell yesterday to levels close to a five-year low hit in mid-August.
Spain’s reluctance to seek a bailout underpinned demand for safe-haven German Bunds.
Madrid will seek today to raise up to €4.5 billion (RM18 billion) in three-year and 10-year bonds, after completing smooth sales of bills earlier in the week.
“There are tentative signs of a loss of short-term momentum in the euro risk trade following concerted central bank activity... Investor optimism may be tempered in the short term by poor macro momentum and the potential for euro zone political volatility,” said Barclays Capital analysts in a note.
US crude inched down 0.2 per cent to US$91.76 a barrel while Brent inched up 0.1 per cent to US$108.034.
Data today showed Japan’s exports fell for a third straight month in the year to August while manufacturing sentiment hit its lowest since February – more evidence that slackening global demand is taking its toll on the export- reliant economy.
Exports to China, the biggest destination for Japanese shipments, fell 9.9 per cent in the year to August, while those to the United States, the No. 2 export market for Japan, rose 10.3 per cent, the data showed. — Reuters