Headline shares of the Asia Pacific market closed mostly down on Tuesday, 23 September 2014, after a private survey in China showed factory employment slumped to a 5-1/2-year low, offsetting benefits from the same survey showing China's factory sector beat expectations. Meanwhile, downbeat euro zone economic data also weighed on regional stocks.
The HSBC flash manufacturing Purchasing Managers' Index (PMI) rose to 50.5 from a final reading of 50.2 in August, better than expectations for a reading of 50, which separates expansion from contraction. Flash China Manufacturing Output Index at 51.8 in September, unchanged from August's two-month low of 51.8. The final HSBC/Markit manufacturing PMI for the month is due on Sept. 30, while the official reading from the National Bureau of Statistics and China Federation of Logistics and Purchasing will be released on October 1.
Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co- Head of Asian Economic Research at HSBC said picture is mixed, with new orders and new export orders registering some improvement. Meanwhile, the employment index declined further and disinflationary pressure intensified. Economic activity in the manufacturing sector showed signs of stabilization in September. However, overall the data still point to modest expansion. The property downturn remains the biggest downside risk to growth. We continue to expect more monetary easing from the PBoC in order to steady the recovery.
Separately, financial information company Markit said in its monthly survey on Tuesday that its purchasing managers' index for the eurozone - a gauge of business activity - fell to a nine-month low of 52.3 in September from the previous month's 52.5.
A preliminary report from Markit Economics showed that a purchasing managers' index for euro-area manufacturing fell to 50.5 this month from 50.7 in August. The manufacturing PMI for Germany, Europe's largest economy, slumped to 50.3, its lowest reading since June 2013, while a services industry PMI for France, the bloc's second-biggest economy, faltered after just two months in growth territory.
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Among Asian bourses
Aussie shares bounce after China PMI data
Australian share market closed sharp higher, as better than expected China's manufacturing activity data sparked buying activities across the board, with shares of financials and materials companies being major gainers. The benchmark S&P/ASX 200 Index advanced by 52.70 points, or 0.98%, to 5415.70 and the broader All Ordinaries Index gained 47.70 points, or 0.89%, to 5415.90. Turnover was relatively strong with 2.08 billion shares worth of A$4.49 billion traded today.
Materials and resources stocks advanced, with resources giant BHP Billiton adding 0.3% to A$34.95 following its announcement it will cut 700 workers across its Queensland metallurgical coal mining business. Main rival Rio Tinto gaining 0.3% to A$60.20. Fortescue Metals Group added 2.2% to A$3.66
Shares of crop protection group Nufarm was up 12.2% to A$4.52 after it said it was confident of lifting underlying earnings, despite a 51% drop in its headline net profit after tax to A$37.71 million due to restructuring costs.
Internet services provider TPG Telecom jumped 6.1% to A$7.00 after the company forecast earnings growth of 25% over the next year, exceeding analyst earnings expectations reporting.
Shanghai Composite bounces 0.87%
Mainland China share market ended modest higher, recouping almost half of yesterday's losses, after private survey data showed that China's manufacturing activity unexpectedly picked up pace in September. Market gains were, however, limited amid concerns about liquidity crunch after the initial public offering plans of five companies. The benchmark Shanghai Composite index advanced 19.85 points, or 0.87%, to finish at 2309.72. The CSI 300 index was up 20.54 points, or 0.86%, to 2399.46.
Shares of Property developers rebounded on bargain hunting, after the 21st Century Business Herald said the four biggest banks may loosen criteria for mortgage lending. Poly Real Estate climbed 1.3%. China Vanke Co. gained 1.2% in Shenzhen.
Shares of industrial companies climbed up, led by shipping players after private data showed China's manufacturing activity unexpectedly picked up pace in September on strong orders. China Shipbuilding Industry Co. climbed 1.9% and China CSSC Holdings Ltd. jumped 6%.
Hang Seng ends 0.49% down
Hong Kong share market finished the session in red terrain, despite data indicating a surprise pick-up in Chinese manufacturing activity in September. The benchmark index opened lower following the US and European equity markets, but reversed its path after the HSBC flash China manufacturing PMI rose to 50.5 in September from 50.2 in August. In afternoon session, it reverted to the south again. The Hang Seng Index closed 118.42 points, or 0.49%, down at 23837.07. Market turnover reduced to HK$71.56 billion, from Monday's turnover of HK$72.35 billion.
Shares of Sands China slid 3% to HK$43.25. It was the worst performing blue chip, followed by Galaxy Ent, which dipped 2.5% to HK$48.8.
China Mobile inched up 0.3% to HK95.1 after Goldman Sachs upgraded its target price for the telco. Goldman Sachs raised its target price for China Mobile to HK$113 from HK$95, and maintained its "buy" call.
Esprit Holdings added 2.7% to HK$12.74 after its net turned from red to black. Esprit Holdings posted a net profit of HK$210 million for the year ended 30 June 2014, as compared to the loss of HK$4,388 million for the previous financial year. The turnover was HK$24,227 million, a decrease of 6.5% from a year earlier. The gross profit margin improved 0.6 percentage point to 50.2%.
Tencent Holdings, a Chinese provider of instant-messaging services and games, softened 1.8% to HK$118.9, as Alibaba Group met profit taking on its second trading day in the US market. Citic 21CN Co., in which Alibaba Group Holding owns a stake, tumbled 13.4% to HK$5.12.
Sensex fall on profit-taking, weak global cues
Indian stock market closed sharp lower amid broad profit-taking by funds and retail investors ahead of September month F&O expiry this week. Meanwhile, weak global markets also weighed on Indian markets. All the sectoral indices on the BSE were in the red with realty, banking, metal stocks particularly witnessing strong selling pressure. The Sensex provisionally closed 1.58%, or 430.58 points, lower at 26775.69 points, while the National Stock Exchange's broader barometer 50-share Nifty shed 1.58%, or 128.45 points, to provisionally end at 8017.85 points.
Buying by foreign investors slowed down in the past week with foreign institutional investors (FIIs) selling on average Rs. 73 crore per day between September 16-19. In comparison, their average daily buying during September 9-15 stood at Rs. 393 crore and during September 1-8 at Rs. 990 crore.
DLF declined 6.51%. A foreign brokerage has reportedly downgraded the stock to reduce from hold and cut its target price. The brokerage cited limited upside potential for shares and no major potential catalysts in the near-term. It highlighted DLF's weak operational data and negative news flow from ongoing legal cases.
Elsewhere in the Asia Pacific region-- Taiwan's Taiex index declined 0.54% to 9084.90. South Korea's KOSPI index lost 0.51% to 2028.91. Indonesia's Jakarta Composite index fell 0.61% to 5188.11. Malaysia's KLCI dropped 0.32% to 1840.19. New Zealand's NZX50 jumped 0.1% to 5241.44, extending yesterday gain, after John Key won a third term as prime minister. Singapore's Straits Times index closed edge 0.05% up at 3298.09. Japanese markets were closed for a public holiday.
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