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ASIA MARKETS: Asia Stocks Lower As Chinese Data Disappoint
By Daniel Inman
Asian stock markets traded lower on Monday as slowing manufacturing growth weighed on China, while a stronger yen hit Japanese stocks.
China was a focus on Monday, with Shanghai and Hong Kong reacting to economic news, as HSBC's preliminary December manufacturing data for China fell to 50.5 in December, compared with a final reading of 50.8 in November. A reading above the 50 mark indicates an expansion in factory activity.
The Shanghai Composite ended 1.6% lower, and in Hong Kong, the Hang Seng Index fell 0.6%.
Earlier in the year, preliminary manufacturing data was a major driver of regional markets, as it fluctuated between growth and contraction. The latest reading was a three-month low, pointing to slowing growth in the country's all- important manufacturing sector.
"The decline in the flash PMI suggests growth momentum has started to weaken. We believe this trend will continue in the first half of 2014, as market interest rates keep rising and pushing up financing costs for corporates," said Zhang Zhiwei, an economist at Nomura.
Away from China, the upcoming Fed policy meeting continued to weigh on sentiment in Asia, with some expecting the central bank to start cutting its stimulus measures at its policy meeting that concludes on Wednesday.
Speculation over the Fed's monetary-policy plans has been a major focus for global markets ever since the summer, when fears that the central bank's easy-money plans would begin to roll back resulted in a series of selloffs in Asia.
As a result, most regional markets drifted lower on Monday, with South Korea's Kospi down 0.1%, and Australia's S&P/ ASX 200 0.2% lower
The caution was also evident in a stronger yen (USDJPY), with the dollar trading at Yen102.74 on Monday, compared with Yen103.23 late Friday in New York.
The firmer yen weighed on Japanese shares, with the Nikkei Average down 1.6%, overshadowing a mixed outcome from the Bank of Japan's quarterly tankan survey. Although the survey showed that the country's major manufacturers are at their most upbeat in six years, it indicated that big companies lowered their investment plans for the current financial year.
Shares in Softbank Corp. (9984.TO) -- one of the largest constituents on the Nikkei Average -- fell 3.2% after The Wall Street Journal reported that the firm's Sprint (S) unit is considering a takeover of its smaller rival T-Mobile US (TMUS), with a bid potentially coming in the first half of 2014.
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