Monday's decline followed a tumble on Wall Street on Friday as data showed U.S. economic growth slowed sharply to a less-than-expected 2.6% in the fourth quarter, well below the 5% in the previous three months. The Dow Jones Industrial Average fell 1.5%, while the S&P 500 declined 1.3%. The tech-heavy Nasdaq Composite shed 1%.
Asian markets also reacted bearishly to news of further weakness in manufacturing activity in China. China's official purchasing managers' index of manufacturing activity shrank last month for the first time in more than two years, data released at the weekend showed. A mainland factory gauge from HSBC Holdings Plc/Markit Economics also missed estimates. The weaker than expected manufacturing data heightened concerns that the world's second largest economy was still struggling to gain traction after expanding at its slowest pace in 24 years in 2014.
China's official manufacturing purchasing managers index fell to a weaker-than-expected 49.8 in January 2015 from 50.1 in December 2014, its first dip below 50 since September 2012. A final reading of the HSBC China Manufacturing Purchasing Managers Index (PMI) slightly dropped to 49.7 in January 2015 from a preliminary reading of 49.8, while fractionally up from a final reading of 49.6 in December 2014. A reading below 50 indicates contraction from the previous month, while anything above that shows expansion.
Among Asian bourses
Australia market extends rally on rate cut hopes
The Australian share market advanced for eighth consecutive session, amid speculation that the central bank will lower interest rates at policy meeting on Tuesday. The benchmark S&P/ASX 200 Index rose 0.66% to 5625.30 and the broader All Ordinaries Index gained 0.63% to 5586.50. In the January 2015, the S&P/ASX 200 Index rose 3.3% and the All Ordinaries went up 3%.
Australian investors shrugged off the weak manufacturing activity data in China, the country's largest trading partner, and continued to pour money into higher-yielding equities, expecting that the reserve bank will lower interest rates when its policy-making board meets for the first time this year.
Financial stocks extended riding higher on growing speculation that the Reserve Bank of Australia could cut interest rates. Commonwealth Bank of Australia advanced 0.4% to A$89.68, ANZ Banking Group 1.1% to A$33.37, National Australia Bank 0.1% to A$35.65, and Westpac Banking Corp 1.1% to A$34.85.
Energy stocks made some of the biggest advances after oil prices jumped back from six-year lows on Friday. BHP Billiton, the world's biggest miner which also produces oil, gained 1.2% to A$29.60. Oil Search rose 2.7% to A$7.98. Woodside Petroleum advanced 1.1% to A$34.65, while Origin Energy climbed 3.5% to A$11.05.
JB Hi-Fi strengthened 1.8% to A$17.05 as the consumer electronics retailer forecast flat earnings for the full year after reporting a 1.9% fall in first-half net profit to A$88.5 million. The retailer's reaffirmed guidance for full-year sales of A$3.6 billion
Kathmandu crashed 27.5% to A$1.35 after the outdoor clothing and adventure wear retailer forecasted to report a net loss of between A$935,000 and A$1.8 million for the six months ended January 25.
Nikkei ends 0.66% down
Japanese share market ended down, as disappointing US gross domestic product data and weak China's manufacturing activity for January renewed concerns about global growth. Brisk selling in companies that failed to meet earnings expectations also weighed on investor sentiment. The benchmark Nikkei Stock Average declined 0.66% to close at 17558.04, while the broader Topix has lost 0.45% to close at 1408.75.
Cosmetics maker Shiseido Co fell 5.3% to 1796.50 yen after booking third-quarter results showing operating profits down sharply on year to just Y7.9 billion.
Skymark Airlines dived 87.89% to 19 yen after the Tokyo Stock Exchange scrapped trading limits for the budget airliner which filed for bankruptcy protection last week and is due to be delisted in March. Panasonic slipped 0.33% to 1,347.5 yen on news that it would stop making televisions in China and Mexico as part of a restructuring plan aimed at stemming huge losses.
Seiko Epson surrendered 10% to 4340 yen after its third-quarter operating profit of Y32.1 billion fell far short of market expectations and internal guidance. The stock also came under pressure after Nomura Securities Co. cut its price target 5.5% to 5659 yen from 5990 yen, citing higher costs for inkjet printers.
Cell phone operator KDDI Corp lost 3.7% to 8054 yen after Deutsche Bank cut its rating to hold from buy, citing slowing profit growth.
Chubu Electric Power slumped 4.1% to 1,498 yen after cutting its net-income forecast by 26% to 28 billion yen.
Fujitsu shares soared 9.63% to 685.9 yen after the sprawling information technology firm raised its net-profit forecast for the fiscal year to March. The Company has raised 2015 profit forecast by 5.6% to 132 billion yen.
China stocks tumble after disappointing PMI data
Mainland China share market ended lower for fifth consecutive session, as risk aversion selloff triggered across the board amid further signs of weak manufacturing activity in China. The Shanghai Composite Index closed down 2.56% at 3128.30. The gauge has slumped 7.5% over the past five days.
Total of 8 out of ten SSE industry groups declined, with shares of industrial issue falling the most, down 3.8%, followed by utilities (down 3.4%), financial (down 3.1%), energy (down 1.9%), Consumer staples (down 1.4%), consumer discretionary (down 1.3%), materials (down 1.1%), and telecommunication services (down 0.2%). On the upside, information technology sector rose 1.1% and healthcare sector jumped 0.6%.
Stocks in the industrial sector declined the most in Beijing today, with China CNR Corp. and CSR Corp. led declines, sliding by the maximum 10%. Dongfang Electric Corp. fell 8.4%.
Shares of financial companies also ended down. China Life Insurance Co. slumped 6.7%, while Bank of China slid 6.1%.
Aluminum Corp of China dropped 7.1% after the aluminium producer forecasted a net loss of 16.3 billion yuan for CY 2014.
Hong Kong stocks fall after weak China data
Hong Kong share market ended down for third consecutive session, as disappointing US GDP growth data and Chinese manufacturing PMI figures dented optimism about the state of the global economy. The Hang Seng Index declined 22.31 points or 0.09% to 24484.74, off an intra-day high of 24506.81 and day low of 24324.37. Turnover rose slightly to HK$85.17 billion from HK$85.13 billion on Friday.
Within HK 50 blue chips, 21 stocks rose and 27 fell, while remaining 2 stocks ended steady. Tencent (00700) put on 2.9% to HK$135.8. It was the best blue-chip winner. The company has recently teamed up with Cheetah Mobile, a subsidiary of Kingsoft (03888), offering promotional services for Cheetah for an annual charge cap of RMB100 million.
Chinese financial stocks ended mostly lower. China Life (02628) fell 2.3% to HK$29.9. Ping An (02318) slipped 2.3% to HK$80.7. Minsheng Bank (01988) slid 3% to HK$9.16 on news that its president Mao Xiaofeng is being investigated. Mao has tendered his resignation from the bank.
Property counters were higher as some research houses issued bullish reports. Cheung Kong (00001) edged up 0.7% to HK$149.6. Henderson Land (00012) gained 2% to HK$56.5.
On the macro front- Hong Kong's value of total retail sales in December 2014, provisionally estimated at HK$47.8 billion, dropped 3.9% compared with the same month in 2013. The revised estimate of the value of total retail sales in November 2014 rose 4.2% over a year earlier, according to the Census and Statistics Department. After netting out the effect of price changes over the same period, the volume of total retail sales in December 2014 declined 1.3% from a year earlier. The revised estimate of the volume of total retail sales in November 2014 grew 7.6% over a year earlier. For 2014 as a whole, the value of total retail sales was HK$493.3 billion, decreased by 0.2% in value and increased by 0.6% in volume when compared with 2013.
Sensex registers small decline
Indian equity markets finished the first trading session of the month in red in what was a highly volatile trade. As per provisional closing, the S&P BSE Sensex was off 45.86 points or 0.16% to 29,137.09. The CNX Nifty was off 11.45 points or 0.13% at 8,797.45, as per provisional closing.
India's fiscal deficit reached 100.2% of Budget Estimate (BE) in nine months ended December 2014 to Rs 5.32 lakh crore, highlighting tight financial position of the central government. It was 95% of BE in corresponding period last year.
Shares of Sun Pharmaceutical Industries and Ranbaxy Laboratories advanced after US Federal Trade Commission (FTC) has completed its review of the proposed acquisition of Ranbaxy by Sun Pharma and has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). Aviation stocks rallied after steep cut in jet fuel price. Bajaj Auto dropped after weak sales in January 2015. Maruti Suzuki India rose after strong sales in January 2015. Tata Motors advanced after decent sales in January 2015. Ashok Leyland rose after reporting good sales figures in January 2015. Mahindra & Mahindra fell after reporting weak auto and tractor sales in January 2015. Tech Mahindra advanced after strong Q3 earnings. Grasim Industries fell after muted growth in Q3 net profit. Coal India edged lower.
Elsewhere in the Asia Pacific region: Taiwan's Taiex index rose 0.27% to 9386.99. South Korea KOSPI grew 0.18% to 1952.68. New Zealand's NZX50 rose 0.22% at 5756.99. Singapore's Straits Times index was up 0.95% at 3423.35. Indonesia's Jakarta Composite index was down 0.25% to 5276.24. Malaysia market closed on Monday and Tuesday for public holidays.
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