Asian shares mostly lower after US, China data

[HONG KONG] Shanghai stocks tumbled Monday after two gauges of Chinese manufacturing activity showed contraction in January, while some Asian markets were also hit by a sell-off on Wall Street.

Oil prices plunged again after enjoying a strong rally on Friday. The euro ticked up despite falling eurozone prices and continuing concerns about Greece's bailout dispute with its international creditors.

Shanghai tumbled 2.56 per cent, or 82.06 points, to 3,128.30 and Hong Kong closed slightly lower, giving up 22.31 points to 24,484.74. Tokyo slipped 0.66 per cent, or 116.35 points, to end at 17,558.04.

However, Sydney added 0.66 per cent, or 36.98 points, to end at 5,625.30, while Seoul added 0.18 per cent, or 3.42 points, to 1,952.68.

US markets provided a negative lead after the Department of Commerce said Friday that the US economy expanded at an annual rate of 2.6 per cent in the fourth quarter, well below the 5.0 per cent in the previous three months.

Adding to selling pressure was news that prices in the eurozone fell by a record 0.6 per cent in January, fanning concerns the currency bloc is facing years of deflation.

The Dow sank 1.45 per cent, the S&P 500 lost 1.30 per cent and the Nasdaq fell 1.03 per cent.

Traders were also reacting Monday to news that China's official purchasing managers' index (PMI) of manufacturing activity unexpectedly retreated last month for the first time since late 2012.

Data Sunday showed its PMI at 49.8 last month, against 50.1 in December. Anything below 50 points to contraction and anything above indicates growth.

On Monday HSBC said its January PMI was 49.7, a tad up from 49.6 in December but still showing shrinkage.

The results are the latest to highlight the weakness of China's economy, which in 2014 grew at its slowest pace in 24 years. However, it will fan talk of further monetary easing measures.

"We think demand in the manufacturing sector remains weak and more aggressive monetary and fiscal easing measures will be needed to prevent another sharp slowdown in growth," Qu Hongbin, HSBC chief economist for China, said in the release announcing the bank's figure.

On currency markets the dollar was at 117.62 yen in afternoon trade against 117.59 yen in New York late Friday.

The euro bought US$1.1314 and 133.01 yen against US$1.1284 and 132.70 yen in New York.

Traders moved into the single currency after taking a hit Friday on the inflation news and reports that Greece had refused to meet its creditors and rejected fresh loans.

The new anti-austerity Finance Minister Yanis Varoufakis said that despite warnings that Greece would shortly run out of money, the far-left Syriza-led government preferred to forgo fresh cash and instead renegotiate its entire bailout.

On Sunday, as Varoufakis began a tour of Europe to win support for a new debt package, Athens was given a boost when US President Barack Obama told European leaders that imposing tough austerity measures on the country could backfire.

"You cannot keep on squeezing countries that are in the midst of depression," he told CNN's "Fareed Zakaria GPS".

"At some point, there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits." On oil markets US benchmark West Texas Intermediate for March delivery fell US$1.14 to US$47.10, while Brent crude for March closed down US$1.21 at US$51.78.

Gold fetched US$1,274.22 an ounce, down from US$1,264.49 on Friday.

In other markets: - Mumbai fell 0.21 per cent, or 60.68 points, to end at 29,122.27 points.

Telecom major Bharti Airtel fell 3.54 per cent to 359.55 rupees, while Axis Bank rose 4.82 per cent to 617.05 rupees.

- Bangkok edge up 0.09 per cent, or 1.45 points, to 1,582.70.

Oil company PTT Exploration and Production gained 3.21 per cent to 112.50 baht, while supermarket operator Big C Super center dropped 2.90 per cent to 234.00 baht.

- Jakarta closed down 0.25 per cent, or 13.17 points, to 5,276.24.

Lender Bank Central Asia fell 0.19 per cent to 13,350 rupiah, while palm oil producer Astra Agro Lestari rose 0.86 per cent to 23,450 rupiah.

- Singapore rose 0.95 per cent, or 32.15 points, to 3,423.35.

Oil rig maker Keppel Corp rose 0.23 per cent to S$8.72 while Singapore Airlines was down 0.32 per cent to S$12.61.

- Wellington added 0.22 per cent, or 12.69 points, to 5,756.69.

Fletcher Building was up 0.84 per cent at NZ$8.45 and Air New Zealand rose 0.77 per cent to NZ$2.63 - Taipei rose 0.27 per cent, or 25.08 points, to 9,386.99.

Taiwan Semiconductor Manufacturing Co gained 1.06 per cent to NT$142.5 while Hon Hai Precision Industry was 0.23 per cent lower at NT$86.5.

- Manila slipped 0.77 per cent, or 59.20 points to 7,630.71.

Universal Robina Corp fell 0.48 per cent to 206 pesos while telecom giant Philippine Long Distance Telephone Co dropped 0.34 per cent to 2,960 pesos.

- Kuala Lumpur was closed for a public holiday.

AFP