Asia stocks mostly lower after China data
MUMBAI (MarketWatch) -- Most Asian markets fell, with sentiment hit by further evidence of cooling in Chinese manufacturing activity, while the Federal Reserve disappointed investors hoping for new major stimulus measures.
A weaker yen, meanwhile, helped lift Japanese stocks.
Japan's Nikkei Stock Average (100000018) , however, gained 0.8%.
Stocks mostly extended losses after an initial reading of HSBC's China manufacturing Purchasing Managers' Index showed activity slowing in June from the previous month. Read more on HSBC's China manufacturing PMI.
HSBC China chief economist Hongbin Qu said the sharp fall in prices and moderation of new orders pointed to weak domestic demand.
"With external headwinds remaining strong, exports are likely to decelerate in the coming months," he said in a statement.
Commodity-tied firms were notable decliners following the data. In Australia, iron-ore producer
Energy firms were also mainly weaker across Asia, as Nymex crude-oil futures (CLN2) traded below $81 a barrel in the electronic session.
Chinese financials also came under selling pressured.
The subdued session followed losses for most U.S. stock indexes on Wednesday after the Federal Reserve extended its "Operation Twist" program to push down long-end yields, but disheartened some investors by failing to issue more far-reaching measures. The Fed said it would expand its program to replace short-term bonds with longer-term debt by $267 billion through the end of 2012. See report on Fed bond buys.
The central bank also cut its growth forecasts. Read more on Fed's outlook cut.
Mitul Kotecha, Credit Agricole strategist, said the Fed's decision "left markets with a taste of disappointment."
"Nonetheless, any downside to risk assets was limited by the potential for more quantitative easing somewhere down the line," Kotecha said.
But while much of the region's markets moved lower, a weaker Japanese yen supported major Tokyo-listed exporters.
Recently battered shares of
Mitsubishi Electric advanced 1.3%, Hitachi slipped 0.6% and NEC shares fell 0.8%.