Forexpros – Asian stock markets retreated on Monday, but came off their lowest levels of the session following the release of Chinese manufacturing data, which showed an improvement in April.
During late Asian trade, Hong Kong’s Hang Seng Index fell 0.85%, Australia’s ASX/200 Index dipped 0.3%, while Japan’s Nikkei 225 Index eased down 0.15%.
The HSBC Flash Purchasing Managers Index, an indicator of China’s industrial activity, rose to 49.1 in April from a final reading of 48.3 in March, as new business rose from multi-month lows and export orders perked up.
While the data remained below the 50.0-mark, indicating contracting economic activity, the report suggested that a slowdown in Chinese economic growth may have bottomed out in the first quarter, easing concerns over a ‘hard landing’.
In Hong Kong, shares in property developers and financial sector stocks were mixed, as hopes for fresh monetary easing by China to prop up growth remain.
Bank of China Hong Kong shares added 0.5%, Sun Hung Kai Properties rose 1%, while insurance giant Ping An dropped 1.8% and China Construction Bank slumped 1.15%.
Shares in China Mobile declined 2.4% after the company reported only a modest increase in first-quarter profits on Friday.
Elsewhere, the Nikkei swung between modest gains and losses for most of the session, as markets participants stuck to the sidelines ahead of a key Bank of Japan policy meeting next week.
The Nikkei rallied more than 19% in the first three months of the year, buoyed in large part by an unexpected easing announcement by the Bank of Japan in February, but the index has fallen nearly 6% since the start of April.
Most traders expect the correction to continue until the end of the month, when the BoJ meets for its April policy meeting, amid expectations the central bank will implement new easing measures.
A report in the Asahi Newspaper earlier in the day said that the central bank was considering expanding the target of its asset purchase program from two-year bonds to bonds with maturities of up to five years.
Shares in Mitsui Chemicals dropped 4.15% in heavy trade, hitting its lowest level in three months, after the company said there had been an explosion and fire at one of its glue factories, killing one employee and injuring some 20 workers and nearby residents.
Meanwhile, Tokyo Steel Manufacturing tumbled 7.6% after the company lowered its annual dividend following an operating loss of JPY11.3 billion in the year ended March 31.
Looking ahead, the outlook for European stock markets was downbeat, amid uncertainty over the result of France’s presidential election, after President Sarkozy preformed poorly against challenger Francois Hollande in the first round of the vote.
The EURO STOXX 50 futures pointed to a decline of 0.95%, France’s CAC 40 futures indicated a drop 1%, Germany’s DAX futures shed 0.75%, while London’s FTSE 100 futures declined 0.5%.
Later in the day, the euro zone was to publish preliminary reports on manufacturing and services sector growth, while France and Germany were to produce individual data.
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