Asian Stocks Outside Japan Decline After China PMI Data

Photographer: Carla Gottgens/Bloomberg

Customers walk past clothing displayed for sale inside a Hennes & Mauritz AB (H&M) fashion store in Melbourne. Inflation in Australia probably quickened to 3.2 percent in the first quarter from a year earlier, up from 2.7 percent growth in the previous three months, according to the median of 27 analysts’ estimates compiled by Bloomberg. Close

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Photographer: Carla Gottgens/Bloomberg

Customers walk past clothing displayed for sale inside a Hennes & Mauritz AB (H&M) fashion store in Melbourne. Inflation in Australia probably quickened to 3.2 percent in the first quarter from a year earlier, up from 2.7 percent growth in the previous three months, according to the median of 27 analysts’ estimates compiled by Bloomberg.

Asian stocks outside Japan fell, with a gauge of Chinese shares in Hong Kong sliding, after a private manufacturing report signaled persisting weakness in the mainland economy.

China Overseas Land & Investment Ltd., the largest mainland developer traded in Hong Kong, lost 3.5 percent, leading declines on the Hang Seng Index. China Mobile Ltd. fell 2.6 percent after the world’s biggest phone company posted its third straight drop in quarterly profit. Resona Holdings Inc. climbed 2.5 percent after Greenlight Capital Inc., a hedge fund run by David Einhorn, said it bought shares in the Japanese lender.

The MSCI Asia Pacific excluding Japan Index slipped 0.4 percent to 480.41 at 6:57 p.m. in Hong Kong, its lowest level since April 16. The broader measure added 0.3 percent to 138.97. The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was 48.3 in April, matching the median estimate of analysts surveyed by Bloomberg. The reading rose from March’s final figure of 48 while remaining below the expansion-contraction dividing line of 50.

“The fact that the figure is still well below 50 is an indication that there’s some fairly serious weakness in China’s manufacturing sector,” Peter Elston, Singapore-based head of Asia-Pacific strategy and asset allocation at Aberdeen Asset Management, which oversees about $312.5 billion, said by phone “I certainly wouldn’t argue the slight increase compared with the previous month is a sign of things turning around.”

The Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong declined 1.3 percent to the lowest level since March 27, while the Hang Seng dropped 1 percent. China’s Shanghai Composite Index (SHCOMP) lost 0.3 percent.

Growth Target

Premier Li Keqiang last week said China isn’t considering “strong” stimulus, and reiterated that economic growth a bit higher or lower than the government’s 7.5 percent target is within a reasonable range. The government yesterday lowered reserve ratios at some rural lenders.

There are “now expectations that the target of 7.5 percent Chinese GDP growth for this year might be the top end of guidance,” Tony Farnham, an economist at Patersons Securities Ltd. in Perth, said by phone. “The actual growth number may be a little below that.”

South Korea’s Kospi index and Taiwan’s Taiex index both lost 0.2 percent. Singapore’s Straits Times Index slipped 0.6 percent, retreating from a 10-month high. Japan’s Topix index rose 1 percent. New Zealand’s NZX 50 Index gained 0.7 percent.

Australian Inflation

Australia’s S&P/ASX 200 Index climbed 0.7 percent to its highest close since June 2008. The nation’s core consumer prices gained less than economists forecast last quarter, allowing the central bank to extend a period of steady interest rates. The trimmed mean gauge of core prices rose 0.5 percent from the previous quarter, the Bureau of Statistics said in Sydney today, compared with the median forecast of 25 economists for a 0.7 percent gain.

Chinese developers and coal producers led losses in Hong Kong as a fourth month of contraction for mainland factory activity added to concern the nation may miss its economic-growth goal.

China Overseas Land declined 3.5 percent to HK$19.34. China Resources Land Ltd. slipped 1.7 percent to HK$15.98. China Coal Energy Co. dropped 3 percent to HK$4.25.

China Mobile fell 2.6 percent to HK$70. Net income slid 9.4 percent to about 25.24 billion yuan ($4.1 billion) in the first quarter, the Beijing-based company reported yesterday. Profit was expected to be 27 billion yuan, based on the median of five analysts’ estimates compiled by Bloomberg News.

Samsung Heavy

Samsung Heavy Industries Co., the world’s second-largest shipyard, fell 6.4 percent to 29,150 won in Seoul, its lowest price since January 2012. Samsung Group has been conducting an internal audit on the company since February, the Korea Economic Daily reported, citing officials at the group it didn’t identify. Samsung Heavy spokesman Koo Sang Ok declined to confirm details. Two calls to Samsung Group weren’t immediately answered.

Among stocks that advanced, Resona gained 2.5 percent to 493 yen in Tokyo. Einhorn’s Greenlight said it bought the stock at 547 yen per share and described the Tokyo-based bank as “cheap on both an absolute and relative basis,” according to a letter sent to clients yesterday.

Seibu Holdings Inc., operator of Japan’s biggest hotel chain, jumped 11 percent to 1,770 yen on its trading debut in Tokyo after pricing its public offering at the bottom of its planned range.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editors responsible for this story: Tom Redmond at tredmond3@bloomberg.net John McCluskey

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