Asian shares mixed as Nikkei up on weak yen, HSBC flash PMI drops

Investing.com - Asian shares were mixed on Thursday after the HSBC November flash PMI just managed to hold onto expansion territory.

The HSBC China November flash manufacturing PMI fell to 50, a drop from October's final three-month high of 50.4, and a six-month low.

"The HSBC China Manufacturing PMI moderated to a six-month low of 50.0 in the flash reading for November, down from the October final reading of 50.4," said Qu Hongbin, HSBC's chief China economist, said in an accompanying statement.

"New export order growth continued to ease and led to a below-50 reading for the output sub-index for the first time since May. Disinflationary pressures remain strong and the labor market showed further signs of weakening. Weak price pressures and low capacity utilization point to insufficient demand in the economy. Furthermore, we still see uncertainties in the months ahead from the property market and on the export front. We think growth still faces significant downward pressures, and more monetary and fiscal easing measures should be deployed."

The Nikkei 225 traded 0.3% higher this morning. Honda Motor Company Ltd (TOKYO:7267) recovered 2.1% after slumping yesterday from the U.S. demand to recall cars with air bags made by Takata Corp (OTC:TKTDY). Honda is Takata's largest customer. Toyota Motor Corp Ltd Ord (TOKYO:7203) rose 0.7%.

Across the ocean, preliminary manufacturing reading from HSBC showed that manufacturing in China failed to grow at all in November. The reading was just at 50, lower than October's 50.4. Chinese equities are little changed after the flash PMI data came out.

This morning, the Hang Seng Index fell 0.3%, the Hang Seng China Enterprises Index dropped 0.3%, and the Shanghai Composite Stock Market Index retreated 0.2%.

Overnight, U.S. stocks ended Wednesday largely lower after investors applauded dovish minutes from the Federal Reserve's most recent policy meeting and then sold on sentiments the document revealed no major changes in the direction of U.S. monetary policy.

The Dow 30 fell 0.01%, the S&P 500 index fell 0.15%, while the Nasdaq Composite index fell 0.57%.

Monetary authorities agree the economy is no longer in need of stimulus tools such as asset purchases, though concerns persist that inflation expectations may be dipping, the minutes of the Federal Reserve's October policy meeting released Wednesday revealed.

At its October monetary policy meeting, the Fed left its benchmark interest rate unchanged at 0.00-0.25% and said it was closing its monthly bond-buying program in a move widely expected by markets.

Stocks rose initially on the dovish report, though they gave back gains on sentiments that the Federal Reserve is using such language to gradually acclimate markets to less accommodative policy down the road as opposed to reversing course, and higher borrowing costs are on the way.

Solid U.S. housing data failed to draw applause as investors remained in standby mode awaiting fresh data due out on Thursday.

The U.S. Commerce Department reported earlier that the number of building permits issued last month increased by 4.8% to 1.080 million units from September's revised total of 1.031 million.

Analysts expected building permits to rise by 0.9% to 1.040 million units in October, which suppressed gold prices by stoking expectations that tighter monetary policy is on the way in roughly a year or possibly sooner.

The report also showed that U.S. housing starts fell by 2.8% last month to hit 1.009 million units from September’s total of 1.038 million units, compared to expectations for a drop to 1.025 million.

On Thursday, the U.S. is to release data on initial jobless claims, consumer prices, existing homes sales and manufacturing activity in the Philadelphia region.