Asian shares wobble as China PMI weighs

TOKYO: An index of Asian shares wobbled between positive and negative territory yesterday after a measure of Chinese factory activity unexpectedly skidded to an 11-month low, pointing up weakness in the economy.

The flash HSBC/ Markit Purchasing Managers’ Index (PMI) dipped to 49.2 in March, below the 50-point level. Economists polled by Reuters had forecast a reading of 50.6, slightly weaker than February’s final PMI of 50.7.

MSCI’s broadest index of Asia- Pacific shares outside Japan was up about 0.1 per cent in choppy trade after the Chinese figure knocked it off early highs.

The private survey is likely to add to calls for more policy easing from Beijing, even after two interest rate cuts since November, a reduction in the amount of money banks must keep in reserve and repeated attempts by the central bank to reduce financing costs.

The Shanghai Composite Index sagged 0.8 per cent, on track to break a nine-day rally that pushed major Chinese indexes to their highest levels in nearly 7 years.

Japan’s Nikkei stock average slipped about 0.1 per cent, pulling away from the previous session’s 15-year highs.

“The market is sensitive to good news and is numb to bad news now, but it does seem overbought in a short period of time so profit- taking is natural,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

In Japan, a similar manufacturing survey added to concerns that its slowly recovering economy also may be losing momentum, with activity expanding at a much slower clip as domestic orders contracted.

The US dollar edged slightly higher on the day against a basket of currencies, but still remained well off its recent highs as investors bet that the US Federal Reserve will stay its hand on hiking interest rates in the months ahead. — Reuters