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Asia stocks off the lows after China PMI data; Nikkei ends down 0.7%

Published 10/24/2012, 03:43 AM
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Investing.com - Asian stock markets were mixed during late Asian trade on Wednesday, with most regional markets coming off the lowest levels of the day following the release of data showing manufacturing activity in China improved in October.

Ongoing concerns over disappointing corporate earnings results from U.S. companies continued to weigh on appetite for equities.

During late Asian trade, Hong Kong's Hang Seng Index rose 0.4%, Australia’s ASX/200 Index ended down 0.8%, while Japan’s Nikkei 225 Index fell 0.7%.

Midway through the session, data showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to 49.1 in October from a final reading of 47.9 in September.

Despite the modest uptick higher, manufacturing activity in China remained in contraction territory for the 12th consecutive month.

In Hong Kong, the benchmark Hang Seng index recovered from earlier losses to trade higher following the China PMI report, pulled higher by Hong Kong-listed firms linked to China’s economic health.

Property developers Sun Hung Kai Properties jumped 3.9%, Sino Land rose 3.5%, Hang Lung Properties added 3.8%, while mainland developer Agile Property Holdings added 2.6%.

On the downside, Europe-focused retailer Esprit Holdings tumbled 6.2% after announcing a heavily discounted rights issue late Monday.

Elsewhere, in Tokyo, the Nikkei came under pressure amid increasing concerns over the outlook for global economic growth and the impact on corporate earnings results.

Shares in Kawasaki Heavy Industries lost 5.7% after it cut its first-half net-profit outlook to JPY12.4 billion from an earlier projection of JPY14 billion.

Market players were also jittery amid ongoing uncertainty over a bailout plan for Spain. Investors have been anticipating for the past month that the Spanish government would ask for a full-scale sovereign bailout.  

A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.

Market participants are also turning their attention to the Federal Reserve's two-day policy-setting meeting, which concludes later in the day, after the central bank announced its third round of quantitative easing last month.

Meanwhile, shares in Australia were dragged lower by losses in miners, which came under pressure amid the uncertain global growth outlook.

Mining heavyweights Rio Tinto and BHP Billiton lost 1.4% and 1% respectively, while gold producer Newcrest Mining dropped 2.5%.

In Europe, regional markets were mixed after the open, following data showing German manufacturing activity contracted sharply in October.

The EURO STOXX 50 eased up 0.1%, France’s CAC 40 added 0.25%, London’s FTSE 100 edged down 0.1%, while Germany's DAX was little changed.

Later Wednesday, the Federal Reserve was to announce its benchmark interest rate and release its first monetary policy statement since the central bank announced a third round of quantitative easing in September. The U.S. was to release official data on new home sales.

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