MW: Asia markets pare gains after China economic data
By V. Phani Kumar, Colin Ng & Leslie Shaffer
HONG KONG (MarketWatch) -- Asian markets ended mixed on Thursday, with several markets paring gains as resource stocks fell after Chinese economic data sparked fresh worries of further tightening measures from Beijing.
Japan's Nikkei Stock Average of 225 companies advanced 1% to 10664.95, Hong Kong's Hang Seng Index inched up 0.1%, Taiwan's Taiex lost 0.4%, South Korea's Kospi shed 0.3% and Australia's S&P/ASX 200 slipped 0.1%.
Among Chinese stock benchmarks, the Shanghai Composite rose 0.1%, giving up most of its early gains, while the Shenzhen Composite index slid 0.1%.
China's consumer price index rose a faster-than-expected 2.7% in February from the year earlier period, quickening from January's 1.5% rise. The rise in CPI and a robust 20.7% jump in January-February industrial output fueled concerns of further credit tightening. See related story.
"Another reserve requirement ratio hike is likely imminent, while the first interest rate hike of 27 basis points should come as early as April, followed by two more hikes in the third quarter and fourth quarter," said Morgan Stanley economist Wang Qing.
In afternoon trading, India's Sensex gained 0.2% and Singapore's Straits Times Index advanced 0.1%. Dow Jones Industrial Average (INDU 10,567, +2.95, +0.03%) futures were down 23 points in screen trade.
Resource sector shares were hurting on concerns any policy tightening measures from Beijing may hamper Chinese demand for commodities. BHP Billiton (AU:BHP 42.95, -0.23, -0.53%) (BHP 79.09, +0.22, +0.28%) and Woodside Petroleum (AU:WPL 45.27, -0.22, -0.48%) (WOPE.Y 41.84, +0.75, +1.83%) gave up 0.5% in Sydney, Posco (PKX 124.96, +0.96, +0.77%) dropped 0.9% in Seoul, Nippon Steel Corp. (NIST.Y 38.26, -0.74, -1.90%) (JP:5401 344.00, -2.00, -0.58%) shed 1.2% in Tokyo, and Hindalco Industries (HNDN.F 3.59, +0.03, +0.90%) gave up 1.6% in Mumbai trading.
Chinese commodity stocks were also hurt, with Aluminum Corp. of China (HK:2600 8.04, -0.07, -0.86%) (CN:601600 12.50, -0.14, -1.11%) (HK:2600 8.04, -0.07, -0.86%) dropping 0.9% in Hong Kong and 1.1% in Shanghai, while Jiangxi Copper (JIXA.Y 86.75, +0.50, +0.58%) (CN:600362 35.26, -0.54, -1.51%) (HK:358 16.60, -0.18, -1.07%) dropped 1.1% in Hong Kong and 1.5% in Shanghai.
Chinese property stocks weakened, with Agile Property Holdings (HK:3383 10.86, -0.22, -1.99%) (AGPY.Y 71.40, -0.77, -1.06%) sliding 2% and Guangzhou R&F Properties Co. (HK:2777 12.74, -0.20, -1.55%) (GZUH.Y 33.35, +0.11, +0.32%) dropping 1.6% in Hong Kong, while Poly Real Estate Group Co. (CN:600048 19.77, -0.14, -0.70%) dropped 0.7% in Shanghai.
"The tightening concerns are still lingering...The policy picture remains less than clear due to questions on whether the inflation data was a result of fundamentals or one-off seasonal factors such as the Lunar New Year break," said Qian Qimin from Shenyin Wanguo Securities.
Japanese shares were led higher by exporters and financial stocks on the back of overnight gains on Wall Street, though traders said investors were cautious ahead of the settlement of futures contracts Friday.
Honda Motor Co. (HMC 36.15, +0.14, +0.39%) (JP:7267 3,245, +5.00, +0.15%) rose 0.8% and Sony Corp. (SNE 37.65, +0.50, +1.35%) (JP:6758 3,375, +45.00, +1.35%) climbed 1.9%, with Mizuho Financial Group (MFG 4.13, -0.01, -0.24%) (JP:8411 185.00, 0.00, 0.00%) rising 1.1% and Mitsubishi UFJ Financial Group (MTU 5.09, -0.06, -1.17%) (JP:8306 457.00, -4.00, -0.87%) gaining 0.9%. The market was also supported by shipping stocks on hopes of strong earnings growth, which lifted Kawasaki Kisen Kaisha (JP:9107 347.00, -8.00, -2.25%) by 1.4%, while Mitsui O.S.K. Lines (JP:9104 609.00, -8.00, -1.30%) gained 1.3%.
In Seoul trading, Hyundai Motor Co. (HYMT.F 17.70, +0.10, +0.57%) dropped 2.2% and Kia Motors (KIMTF 20.00, -0.35, -1.72%) shed 1.8% on profit-taking. Bucking the market was Korea Exchange Bank, which climbed 4.8% after an official said Wednesday that Dallas-based private equity firm Lone Star Funds planned to hire an adviser for the sale of its stake in the bank.
Earlier in the day, the Bank of Korea left its interest rates unchanged at 2%, saying the economy "continued on a recovering trend." But the central banks' monetary policy committee also warned that uncertainty over economic growth remains because of "problems of excessive government debt in some countries."
In addition to the Chinese economic data, Sydney shares were also weighed down by news that domestic employment for February rose by 400 jobs, compared with expectations for an increase of 15,000.
"The market is fairly fully valued at the moment, so people are slightly cautious," said Shaw Stockbroking institutional trader Craig Sidney in Sydney.
Among other regional markets, New Zealand's NZX 50 stock market fell 0.1% and Philippine stocks ended up 0.2%. In afternoon trading, Indonesian shares advanced 0.6% and Thailand's main index rose 1.3%.
The Reserve Bank of New Zealand had earlier Thursday left its key interest rate unchanged at a record-low 2.5%. The central banks' quarterly monetary policy statement was generally supportive of equities, said Macquarie Equities broker Brad Gordon.
Lead March JGB futures fell 0.26 to 139.15 points, while the benchmark 10-year cash JGB yield added 1.5 basis points to 1.315%. Economic data released earlier in the day revised down Japan's fourth-quarter gross domestic product to an annualized growth of 3.8%, from a preliminary reading of 4.6%.
"The economy is managing to grow through exports, but the problem is that those gains from exports aren't strongly filtering through to domestic demand," said Toshihiro Nagahama, senior economist at Dai-Ichi Life Research Institute.
