By Dow Jones Business News, November 01, 2013, 01:05:00 AM EDT
--China factory report shows signs of weakness
--Hong Kong, China stocks flat
--Sony tumbles 12% in Tokyo
Stocks in Asia were mostly lower Friday after an official gauge of last month's Chinese factory activity showed signs
China's manufacturing Purchasing Managers Index rose to 51.4 in October from 51.1 in September, indicating expansion
and edging past economist expectations. A closer look at the data, however, showed a sizeable gap between large and
small manufacturers, with the latter reporting a contraction in activity for the month.
"Although the PMI rose in October for the fourth consecutive month, the momentum driving the increase is unbalanced,"
said Zhao Qinghe, a spokesman for China'sNational Bureau of Statistics.
Pressure is rising on China to show that it can maintain a recent stabilization of economic growth after a worrying
slowdown in the first half of the year.
Stocks on Hong Kong's benchmark Hang Seng Index and China's Shanghai Composite were flat in midday trade. In Sydney,
the S&P/ASX 200 fell 0.2%.
South Korea was a bright spot in the region after the country reported a stronger-than-expected 7.3% rise in exports
last month. Economists polled by The Wall Street Journal on average expected a 4.5% rise. Imports rose 5.1%, also more
Investors have flocked to South Korean stocks since late summer, attracted by the country's strong finances and stable
currency. The benchmark Kospi index rose 0.3% Friday.
In Japan, the Nikkei 225 index reversed earlier gains, falling 1.1% as the yen firmed against the U.S. dollar. The
Japanese currency recently was at Y97.95 versus Y98.36 late Thursday in New York.
Technology earnings were on the radar in Tokyo. Sony Corp. ( SNE ) shares slid 12% after the company reported a wider
loss for the September quarter and slashed its profit forecast for the year by 40%.
Pointing in the other direction, SoftBank Corp. (9984.TO) shares rose 2% after the telecom company reported a 44% leap
in quarterly profit, helped by strong demand for Apple Inc. ( AAPL ) iPhones sold by its mobile unit in Japan.
"Clearly the earnings picture is a compelling one, but the lack of clarity in government policy, especially [Japanese]
Prime Minister Abe's "Third Arrow" of structural reforms, seems to be an inhibitor to foreign investor interest," said
CLSA equity strategist Nicholas Smith.
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