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Asia stocks off the lows after upbeat China PMI, Fed outlook weighs

Published 09/23/2013, 02:41 AM
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Investing.com - Asian stock markets came off the lowest levels of the session on Monday, with shares in mainland China moving higher as market sentiment picked up following the release of upbeat Chinese manufacturing data.

Most regional equities remained lower as traders reassessed their expectations regarding the duration of the Federal Reserve’s bond-buying program.

During late Asian trade, Hong Kong's Hang Seng Index declined 0.75%, Australia’s ASX/200 Index ended down 0.45%, while Japan’s Nikkei 225 Index remained closed for a public holiday.

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 a six-month high of 51.2 in September from a final reading of 50.1 in August.

The measure remained above the 50.0-mark for the second consecutive month, indicating expansion in manufacturing activity.

Appetite for riskier assets remained weak after St. Louis Fed President James Bullard said Friday that the central bank’s decision not to taper its stimulus program in September was “close” and did not rule out a small reduction in bond purchases in October.

Markets around the world rallied last week after the Fed decided to leave its USD85 billion-a-month stimulus program unchanged. The decision surprised markets, which had been expecting the central bank to taper its monthly stimulus program by USD10 billion to USD15 billion.

The central bank’s stimulus program is viewed by many investors as a key driver in boosting the price of global equities.

In Australia, the benchmark ASX/200 Index inched lower despite the release of stronger-than-expected Chinese manufacturing data.

Gold miners Newcrest Mining and Kingsgate Consolidated saw shares plunge 8.2% and 5.3% respectively, while Perseus Mining tumbled 15.7% after gold prices fell nearly 3% on Friday.

Elsewhere, in Hong Kong, the Hang Seng was lower after being shut for the morning session due to Typhoon Usagi.

Usagi, which killed at least 25 people in China over the weekend, is rated as this year’s strongest storm.

Gold producer Zijin Mining Group lost 6%, while Zhaojin Mining Industry Company dropped 5.7%.

Looking ahead, European stock market futures pointed to a higher open, following a win for German Chancellor Angela Merkel in weekend general elections.

The EURO STOXX 50 futures pointed to a gain of 0.45% at the open, France’s CAC 40 futures added 0.3%, London’s FTSE 100 futures advanced 0.15%, while Germany's DAX futures pointed to a gain of 0.15% at the open.  

The euro zone was to release preliminary data on manufacturing and service sector activity later Monday. Meanwhile, European Central Bank President Mario Draghi was to testify about the economy before the Committee on Economic and Monetary Affairs, in Brussels.

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