Asia shares slip as China manufacturing data weighs

AFP
Workers load goods in a port in Lianyungang, east China's Jiangsu province on July 1, 2014. Chinese manufacturing picked up slightly in September
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Hong Kong (AFP) - Asian markets mostly fell Thursday, with downbeat Chinese manufacturing data dragging down Hong Kong and Shanghai as concerns grew about the pace of recovery in the world's second-largest economy.

But Tokyo bucked the trend, gaining 0.85 percent, or 131.75 points, to 15,586.20 after US Federal Reserve minutes suggested interest rates may be hiked sooner than expected.

Seoul dropped 1.38 percent, or 28.57 points, to 2,044.21, Hong Kong lost 0.66 percent, or 165.66 points, to 24,994.1, Shanghai slid 0.44 percent, or 9.75 points, to 2,230.46 while Sydney ended flat, edging up 4.3 points to 5,638.9.

Traders were focused on China as the HSBC preliminary purchasing managers index (PMI), which tracks activity in the country's factories and workshops, slipped to 50.3 in August.

The figure was down from a final reading of 51.7 in July and was the lowest for three months, the British banking giant said in a statement.

The indicator is a closely watched gauge of the health of the Asian economic powerhouse, with a reading above 50 indicating the sector is expanding.

"Today's data suggest that the economic recovery is still continuing but its momentum has slowed again," HSBC economist Qu Hongbin said in the statement.

The downward trend in Asian markets came despite a positive lead from Wall Street, where the Dow Jones Industrial Average closed up 0.35 percent at 16,979.13 on Wednesday.

- Early rate hike? -

Minutes from the July 29-30 Fed meeting showed policy makers increasingly at odds over how strong the US labour market is and what that means for inflation -- a key issue in planning rate hikes next year.

The intensifying debate signalled an increased, albeit still measured, level of hawkish sentiment in the Fed that could speed up any rate hike.

Easing fears about the geopolitical crisis in Ukraine has fuelled investor optimism ahead of a speech by the head of the US Federal Reserve.

Slow growth, low interest rates and tepid inflation on both sides of the Atlantic will be in focus when heads of the US and European central banks meet this week in Jackson Hole, Wyoming.

All eyes will focus on Janet Yellen, the Federal Reserve chair, and Mario Draghi, her counterpart at the European Central Bank, with observers looking and listening for signs of what they plan for interest rates.

Yellen is facing calls to begin raising interest rates soon after US measures aimed at stimulating the world's biggest economy are wound up in October.

In forex markets, the dollar was at 103.86 yen in afternoon Asian trade, up from 103.76 yen in New York late Wednesday.

The euro fetched $1.3244 and 137.55 yen against $1.3258 and 137.57 yen in US trade.

In oil markets, US benchmark West Texas Intermediate for October delivery was down 27 cents at $93.18 while Brent for October eased 26 cents to $102.02 in afternoon trade.

Gold traded at $1,282.27 an ounce at 1045 GMT compared to $1,294.76 an ounce late Wednesday.

In other markets:

-- Mumbai eased 0.17 percent or 45.82 points to end at 26,360.11 points.

Bhushan Steel fell 4.97 percent to 130.85 rupees, while Amara Raja Batteries fell 4.38 percent to 571.00 rupees.

-- Bangkok rose 0.04 percent, or 0.64 points, to 1,551.41.

Telecoms company True Corp. lost 4.55 percent to 10.50 baht while power giant Electricity Generating Public Co. gained 4.75 percent to 165.50 baht.

-- Jakarta ended up 0.31 percent, or 15.97 points, at 5,206.14.

Lender Bank Negara Indonesia gained 1.89 percent to 5,400 rupiah, while palm oil firm Astra Agro Lestari slipped 0.66 percent to 26,175 rupiah.

-- Kuala Lumpur lost 0.22 percent, or 4.08 points, to close at 1,874.81.

Malayan Banking fell 0.2 percent to 10.06 ringgit, while plantation giant Sime Darby shed 0.2 percent to 9.48. SapuraKencana Petroleum added 1.5 percent to 4.19 ringgit.

-- Singapore rose 0.01 percent, or 0.44 points, to 3,324.09.

United Overseas Bank was down 0.04 percent to Sg$22.86 while Singapore Airlines declined 0.40 percent to Sg$10.00.

-- Wellington rose 0.24 percent, or 12.58 points, to 5,152.92.

Air New Zealand was up 0.71 percent at NZ$2.13 and Spark lifting 0.34 percent to NZ$2.91.

-- Taipei fell 0.37 percent, or 34.67 points, to 9,253.38.

HTC fell 1.55 percent to Tw$127.0 while TSMC was 0.8 percent lower at Tw$124.5.

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