| San Francisco Chronicle | - |
Jan.
23 (Bloomberg) -- Asian equities slumped, led by Hong Kong shares, the
Australian dollar extended declines and metals fell after a private
survey unexpectedly showed China's manufacturing contracting.
Asia Markets live blog: China data disappointAsia Stocks Fall With Metals After China Factory Data; Yen Gains
Rachel Evans and Kana Nishizawa, ©2014 Bloomberg News
Published 10:29 pm, Wednesday, January 22, 2014
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Jan. 23 (Bloomberg) -- Asian equities slumped,
led by Hong Kong shares, the Australian dollar extended declines and
metals fell after a private survey unexpectedly showed China’s
manufacturing contracting. The yen rose against its major peers.
--With assistance from Emma O’Brien in Wellington and Weiyi Lim, Jonathan Burgos and Masaki Kondo in Singapore. Editors: Nick Gentle, Richard Frost
To contact the reporters on this story: Rachel Evans in Hong Kong at revans43@bloomberg.net; Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2
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The
MSCI Asia Pacific Index dropped 1 percent as of 2:18 p.m. in Tokyo,
while a measure of Chinese shares in Hong Kong slid 2 percent. Standard
& Poor’s 500 Index futures erased a gain to fall 0.3 percent. The
Aussie weakened 0.5 percent versus the dollar and 0.7 percent against
the yen. The greenback is heading for its longest winning streak in 20
months against leading counterparts. Nickel and tin were at least 0.6
percent lower and gold headed for a third straight loss.
Chinese factory output may contract this month, a preliminary survey from HSBC Holdings Plc and Markit Economics signaled today as the People’s Bank of China
added further funds to the financial system to ease a cash shortage.
Toyota Motor Corp. unveils its 2014 sales target in Tokyo while the World Economic Forum
continues in Davos. In the U.S., where manufacturing data, jobless
claims and home-sales numbers today may back the case for further
reductions in Federal Reserve stimulus, McDonald’s Corp. and Microsoft
Corp. report earnings.
“People are worrying about
China’s credit crunch and slowdown and they will take any slice of
negative news on slow growth as a reason to sell,” said Benjamin Tam, a Hong Kong- based portfolio manager at IG Investment
Ltd., which oversees about $1.5 billion. “Slower growth is now the
market consensus. People are watching whether the government can restore
market confidence on sustainable growth.”
Repo Auction
The
HSBC/Markit January flash purchasing managers’ index for China came in
at 49.6, missing the 50.3 median estimate of 19 analysts surveyed by
Bloomberg ahead of the release. The gauge dropped from 50.5 in December;
a reading of 50 is the threshold for expansion.
The
People’s Bank of China conducted 120 billion yuan ($19.8 billion) of
21-day reverse-repurchase agreements today, it said on its website. The
central bank had already injected 255 billion yuan as it attempts to
curb soaring rates in the country. The seven-day repurchase rate, a
gauge of interbank funding availability, jumped 153 basis points on
Jan. 20.
“Growth in China isn’t going to pick up as
the government is focused on rebalancing the economy and reducing
reliance on credit,” Manpreet Gill,
a Singapore-based senior investment strategist at Standard Chartered
Bank, said by phone. “While Chinese equities look inexpensive, they lack
catalysts. Ongoing reforms in China will be a key challenge for markets
this year.”
Relative P/E
Hong
Kong’s Hang Seng Index lost 1.4 percent while the Shanghai Composite
slid 0.5 percent. The Shanghai gauge trades at 7.9 times estimated
earnings, down from a five year average of 13.5 times projected profit,
according to data compiled by Bloomberg. The Hang Seng China Enterprises
Index trades at 6.8 times estimated earnings in Hong Kong versus 13.1
times for MSCI’s Asia-Pacific gauge. Stocks in Tokyo swung between gains
and losses.
The yen gained 0.1 percent against the
U.S. dollar and the euro. Japan’s bonds rose after a 1.2 trillion yen
($11 billion) auction of 20-year government debt attracted
record demand.
The Aussie fell against its 16 major
peers. Growth in China, the South Pacific nation’s biggest export
market, will likely drop to 7.5 percent after expanding 7.7 percent last
year, according to an International Monetary Fund report this week.
“China’s growth outlook is posing a risk to countries like Australia that rely on trade with the nation,” said Hideki Shibata, a senior interest-rate and currencies strategist at Tokai Tokyo Research Center Co.
Greenback Streak
The
Bloomberg Dollar Spot Index rose 0.1 percent, an eighth straight
increase, on speculation improvement in the U.S. economy will encourage
the Federal Reserve to dial back stimulus when policy makers meet next
week. Fed members voted in December to trim bond buying by $10 billion
a month.
South Korea’s won led declines in
emerging-market currencies as it slumped to a two-month low. Malaysia’s
ringgit weakened 0.3 percent while Indonesia’s rupiah fell to the lowest
level in almost two weeks. Thailand’s baht slid the most in a week as
anti-government protests that began late October show no sign
of abating.
Gold dropped to a two-week low, heading for the longest losing streak in a month, as platinum slipped 0.4 percent.
Rubber
extended losses for a fifth day to the lowest in five months amid
speculation that Chinese demand may weaken. Industrial metals retreated.
Nickel retreated 0.7 percent, while tin and zinc lost 0.6 percent
in London.
West Texas Intermediate crude fell for the first time in four days.
--With assistance from Emma O’Brien in Wellington and Weiyi Lim, Jonathan Burgos and Masaki Kondo in Singapore. Editors: Nick Gentle, Richard Frost
To contact the reporters on this story: Rachel Evans in Hong Kong at revans43@bloomberg.net; Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2
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