Sunday, December 15, 2013

Asia stocks lower as China data disappoint

Asian stock markets traded lower on Monday, with the results of an economic meeting in Beijing and slowing manufacturing growth weighing on China, while a stronger yen hit Japanese stocks.

China was a focus on Monday, after a major economic meeting last Friday ended with a reiteration of pledges to boost urbanization — coming within expectations and failing to lift the sentiment in mainland China, where the Shanghai Composite (CN:SHCOMP)  fell 1.4%.

In addition, Chinese markets were reacting to economic news, as HSBC's preliminary December manufacturing data for China fell to 50.5, compared with a final reading of 50.8 in November. A reading above the 50 mark indicates an expansion in factory activity.

Earlier in the year, preliminary manufacturing data was a major driver of regional markets, as it fluctuated between growth and contraction. The latest reading was a three-month low, pointing to slowing growth in the country's all-important manufacturing sector.

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In Hong Kong, the Hang Seng Index (HK:HSI)  fell 0.7%.

Away from China, the upcoming Fed policy meeting continued to weigh on sentiment in Asia, with some expecting the central bank to start cutting its stimulus measures at its policy meeting that concludes on Wednesday.

Speculation over the Fed's monetary-policy plans has been a major focus for global markets ever since the summer, when fears that the central bank's easy-money plans would begin to roll back resulted in a series of selloffs in Asia.

As a result, most regional markets drifted lower on Monday, with South Korea's Kospi (KR:SEU) down 0.2%, and Australia's S&P/ASX 200 (AU:XJO) 0.5% lower

Click to Play China lands its first unmanned probe on the moon

China successfully lands its first unmanned space probe on the moon. The probe carries a moon rover called "Yutu," or "Jade Rabbit," that will embark on a three-month scientific exploration. Photo: CCTV VNR

The caution was also evident in a stronger yen (USDJPY) , with the dollar trading at ¥102.71 on Monday, compared with ¥103.23 late Friday in New York.

The firmer yen weighed on Japanese shares, with the Nikkei Average (JP:NIK)  down 1.2%, overshadowing a mixed outcome from the Bank of Japan's quarterly tankan survey. Although the survey showed that the country's major manufacturers are at their most upbeat in six years, it indicated that big companies lowered their investment plans for the current financial year.

Shares in Softbank Corp. (JP:9984)   (SFTBF)  — one of the largest constituents on the Nikkei Average — fell 2.2% after The Wall Street Journal reported that the firm's Sprint (S)  unit is considering a takeover of its smaller rival T-Mobile US (TMUS) , with a bid potentially coming in the first half of 2014.

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