• China data, Sony influence Asian stocks

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    HONG KONG: Asian markets were mixed on Friday, with Tokyo hit by an 11-percent slump in Sony shares, while Shanghai and Hong Kong were lifted by better-than-expected Chinese manufacturing data.

    The euro fell lower on deflation fears in the eurozone, while the dollar also faced selling pressure following losses on Wall Street.

    Tokyo lost 0.88 percent, or 126.37 points to 14,201.57, and Sydney slid 0.27 percent, or 14.4 points to 5,411.1, while Seoul rose 0.46 percent, or 9.33 points to close at 2,039.42.

    Shanghai closed 0.37 percent higher, adding 7.95 points to 2,149.56, while Hong Kong was up 0.19 percent, or 43.42 points at 23,249.79.

    Mumbai was flat after earlier jumping to a record high, thanks to strong foreign fund inflows and an easing of global economic concerns.

    Buying sentiment remains weak after a sell-off on Thursday when dealers reacted to the Federal Reserve’s better-than-expected summary of the US economy, which fueled speculation that it will soon begin reeling in its stimulus program.

    Japan’s Nikkei suffered as the dollar weakened against the yen, and Sony slumped after it cut its net profit forecast for the year to March by 40 percent on Thursday.

    The once world-beating firm also posted a loss of $160 million in the April-September period, blaming weak demand for digital cameras, personal computers and televisions.

    It also said that it suffered from a poor performance from its film business, which was hit by flops such as White House Down and After Earth starring Will Smith.

    There was some cheer after Beijing said that its official purchasing managers’ index (PMI) of manufacturing activity advanced to 51.4 last month from 51.1 in September.

    Anything above 50 points to growth, while a figure below suggests contraction.

    Traders welcomed the data, which suggested the world’s number two economy is gradually emerging from a slowdown at the start of the year.

    The figures were “surprising slightly on the upside, suggesting that the economy is still in an expansion mode,” ANZ bank economists Liu Li-Gang and Zhou Hao said in a report.

    Concerns remain

    However, despite the upbeat result, government and independent analysts warned underlying data suggested China economic weaknesses remained.

    Zhao Qinghe, a researcher at China’s National Bureau of Statistics, warned in a comment on its website: “The forces driving up the PMI reading were imbalanced as the rebound in subindexes other than output remained relatively weak.”

    Bank of America Merrill Lynch economists called the official figures “above consensus,” adding “further improvement . . . is limited.”

    They said that the gain was mostly fueled by higher output owing to a pick-up in the economy as well as inventory restocking, while new orders, including for exports, slowed.

    In currency trade, the euro edged lower after European Union statistics agency Eurostat said that inflation across the 17-country eurozone fell sharply in October to 0.7 percent, the lowest level in nearly four years.

    The figure was well below the European Central Bank’s target of 2 percent, and raises concerns the region could be in for a period of deflation, putting pressure on policymakers to lower interest rates.

    In Tokyo, the euro fetched $1.3521 and 132.71 yen compared with $1.3579 and 133.60 yen in New York City, while it was also well down from the $1.3708 and 134.85 yen late in Asia on Thursday.

    The dollar also slipped to 98.15 yen from 98.37 yen in New York.

    Wall Street provided another soft lead, with all three main indexes easing for a second straight day. The Dow fell 0.47 percent and the S&P 500 lost 0.38 percent, while the Nasdaq slipped 0.28 percent.

    While the Fed made no reference to the potential impact of October’s government shutdown and did not hint at future plans for the stimulus, analysts noted it did not downgrade its outlook from earlier statements.

    This led some to suggest the central bank could begin to reel the scheme in as early as December.

    AFP

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