By Sarah Turner and V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Stocks in Shanghai and Hong Kong
pulled back Friday as lackluster data on Chinese manufacturing
prompted a retreat after a solid rally in the previous session,
while Japanese shares got a lift as real-estate firms advanced on
an improved outlook.
Hong Kong's Hang Seng Index lost 0.6% and the Shanghai Composite
Index fell 0.3% after jumping at least 2% in the previous session,
while Australia's S&P/ASX 200 index lost 0.4%.
The drop came after two separate sets of manufacturing data
showed activity at Chinese factories leveled off in February as
compared to the previous month. Read: China manufacturing grows
marginally, surveys show.
Several economists, however, said the data may have been
distorted due to the timing of this year's Lunar New Year holidays,
and remained optimistic about growth.
"China's recovery continues on improving domestic-demand
conditions and the labor market. The pace of ongoing recovery is
mild, implying no need for the People's Bank of China to tighten
policy anytime soon," said Hongbin Qu, the chief China economist at
HSBC.
The resource and financial sectors were notably weaker, with
Jiangxi Copper Co. (JIXAY) dropping 2.5%, Aluminum Corp. of China
Ltd. (ACH) skidding 4.8% and Agricultural Bank of China Ltd.
(ACGBY) easing 0.8% in Hong Kong; in Shanghai, the stocks lost
1.4%, 0.8% and 1.7%, respectively.
Sun Hung Kai Properties Ltd. (SUHJY) fell 1.9% in Hong Kong
after cutting its fiscal-year property sales target and reporting a
1.9% decline in first-half underlying net profit.
Resource stocks in Australia also weakened after the China data,
with Fortescue Metals Group Ltd. (FSUMY) sliding 4% and Rio Tinto
Ltd. (RIO) dropping 1.5%.
Newcrest Mining Ltd. (NCMGF) slid 1.8% and Perseus Mining Ltd.
(PMNXF) tumbled 5.6% after gold futures fell for a second straight
session in New York on Thursday.
Japan stocks rise
Meanwhile, Japan's Nikkei Stock Average finished up 0.4%,
extending Thursday's 2.7% surge, with real-estate stocks jumping to
offset a drop in some exporters as the yen strengthened. The South
Korean market was closed for a holiday.
The performance helped Japanese stocks end the week with a 1.9%
advance -- behind the Shanghai Composite's 2% rise, but ahead of
the S&P/ASX 200's 1.4% climb and the Hang Seng Index's 0.4%
increase.
Shares of Japan Real Estate Investment Corp. (8952.TO) rose
3.9%, Mitsui Fudosan Co. (MTSFY) gained 3.2% and Mitsubishi Estate
Co. (MITEY) jumped 6.1%.
Those gains helped the broad market gain even as Fast Retailing
Co. (FRCOY) eased 0.2%, Komatsu Ltd. (KMTUY) dropped 0.6% and Isuzu
Motors Ltd. (ISUZY) shed 1.1%.
"We continue to favor a weaker Japanese yen (USDJPY) over the
medium term. A collapse in Japan's current-account surplus is the
main driver," said foreign exchange strategists at Commonwealth
Bank of Australia.
Sony Corp. (SNE) gained 3.9% after the Nikkei business daily
reported the company had sold a building in Tokyo for 111.1 billion
yen ($1.2 billion).
Sharp Corp. (SHCAF) rose 2.4% after a Kyodo News report that the
electronics firm would soon accept executives from two major banks
to secure their financial support. Read: Sharp to accept executives
from banks.
Tokyo Electric Power Co. (9501.TO) added 2.9% after a Nikkei
News report that the firm was ordering more than Yen10 billion
worth of supplies and equipment to use for decommissioning reactors
at its Fukishima plant destroyed in the 2011 nuclear disaster.
Kobe Steel Ltd. (KBSTY), which was reportedly supplying the
material, added 0.8%.
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