Tuesday, July 23, 2013 11:26 pm
Asian stocks mostly lower as China PMI disappoints
By KELVIN CHANAP Business Writer
Benchmark indexes in Japan and China fell after HSBC said its preliminary purchasing managers index for June declined to an 11-month low, another sign of a deepening economic slowdown. The widely watched report is one of the earliest indicators for clues to the health of China's economy, the world's second biggest.
The Shanghai Composite Index in mainland China tumbled 0.9 percent to 2,025.14 while the smaller Shenzhen Composite Index fell 0.3 percent to 971.26.
Japan's Nikkei 225 fell 0.6 percent to 14,692.83 and Hong Kong's Hang Seng slid 0.3 percent to 21,842.17. Benchmarks in Taiwan and Singapore also slid.
South Korea's Kospi was 0.2 percent higher at 1,907.35 and Australia's S&P ASX 200 was up 0.2 percent to 5,028.10.
While the disappointing manufacturing report dragged down Asia stocks, it also raised investors' hopes that Beijing would consider further stimuli to China's economy following two straight quarters of declining growth. A day before, newspapers reported on comments by China's top economic official, Premier Li Keqiang, who promised that growth would not fall below 7 percent.
"We believe that such negative scenario will not materialize and that China will announce new stimulus measures soon - modest and targeted ones but sufficient for growth to achieve this year's 7.5 percent goal," Credit Agricole CIB strategist Dariusz Kowalczyk wrote in a research note. "The worse the PMI the bigger the measures would be."
In the U.S., the Dow Jones industrial average rose 0.1 percent to close at 15,567.74. The broader Standard & Poor's 500 index dropped 0.2 percent, to 1,692.39 while the Nasdaq composite fell 0.6 percent, to 3,579.27.
In currency markets, the dollar rose to 99.68 Japanese yen from 99.41 yen late Tuesday. The euro fell to $1.3207 from $1.3226.
Benchmark crude for September delivery was down 28 cents to $106.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract closed settled on Tuesday at $107.23.