HONG KONG: Markets across Asia fell on Thursday after data showed Chinese manufacturing activity shrank in January for the first time in six months.
Regional markets were also given a soft lead from Wall Street, which ended mixed as a below-par corporate earnings season continued.
Tokyo fell 0.79 percent, or 125.07 points to close at 15,695.89, giving up earlier gains as the downbeat sentiment sent traders into the yen and away from the dollar.
Sydney fell 1.07 percent, or 56.8 points to 5,263.0. Seoul lost 1.16 percent, or 22.83 points to close at 1,947.59 on news that South Korean economic growth slowed in the October-December quarter.
Shanghai slipped 0.47 percent, or 9.57 points to 2,042.18, and Hong Kong fell 1.51 percent, or 348.35 points to 22,733.90.
Banking giant HSBC said on Thursday that preliminary results showed manufacturing activity in China contracted sharply in January, adding to recent concern about the world’s number two economy.
The bank’s early reading on its purchasing managers’ index (PMI) for this month came in at 49.6, well down from 50.5 in December and its lowest since July. A reading above 50 indicates growth, while anything below signals contraction.
“The PMI figure certainly had an impact on the market, showing there still hasn’t been any improvement in the domestic economy,” Zheshang Securities analyst Zhang Yanbing told Agence France-Presse.
Most of the bank’s sub-indices were also lower, including key new export orders, the survey found.
HSBC economist Qu Hongbin said in a statement the shrinkage was mostly because of cooling domestic demand and added: “As inflation is not a concern, the policy focus should tilt toward supporting growth” to avoid another economic slowdown as seen in the last quarter of 2013.
Shares in Shanghai got some support from news that China’s central bank had pumped almost $20 billion into the financial system on Thursday to ease a liquidity squeeze before the Chinese New Year holiday.