By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) -- Chinese stocks fell on Thursday after
data showing consumer prices rose more than expected, while most
other Asian markets advanced after U.S. and German equities climbed
further into record territory.
The Shanghai Composite dropped 0.4%, and Hong Kong's Hang Seng
Index slipped 0.2% in choppy trading, after official data showed
China's consumer price index rose 2.4% in April from the year-ago
period, driven by food prices. The producer price index, which
measures wholesale prices, dropped a sharper-than-expected
2.6%.
Bank of America Merrill Lynch China economist Ting Lu said that
although consumer prices quickened, a steeper fall in wholesale
prices during the month were likely to limit market reaction.
"Inflation pressure is quite low, and the room remains big for
the new government to maintain relatively accommodative monetary
and fiscal policies. However, we expect no additional stimulus, as
growth could naturally recover a bit, and policy makers can
tolerate a lower growth," Lu said.
Meanwhile, the Nikkei Stock Average rose 0.7% in Tokyo, after
ending Wednesday at its best level since June 2008. The gains were
aided by an improved earnings outlook, after Toyota Motor Corp.
reported robust results for the quarter ended March 31.
The Kospi added 0.8% after a surprise interest-rate cut by the
Bank of Korea.
The S&P/ASX 200 , which on Wednesday also ended at the
highest level since June 2008, was marginally higher in volatile
Sydney trade, after data showing the Australian economy added
substantially more jobs than expected in April.
The strong employment data raised doubts the central bank would
lower interest rates further after trimming the benchmark cash rate
Tuesday.
Asia's stock moves came after the Dow Jones Industrial Average
(DJI) and the Standard & Poor's 500 Index (SPX)both ended at
record highs in the U.S. on Wednesday, while the German benchmark
index also finished at an all-time peak.
Major movers
Chinese property developers fell after the inflation data.
Gemdale Corp. lost 2.8% in Shanghai, China Vanke Co. retreated 1.1%
in Shenzhen, and China Overseas Land & Investment Ltd. (CAOVY)
shed 1% in Hong Kong.
The "key for CPI is that it is still below the government target
for the year. The question is whether this is a reflection of a
wider slowing of the economy," said Kim Eng Securities director of
sales trading Andrew Sullivan.
In Tokyo, shares of Toyota (TM) rose 1.4% after its profit more
than doubled in the quarter ended March 31 on the back of strong
sales in the U.S. and a weakened yen.
Other exporters climbed on upbeat overseas cues, with Fanuc
Corp. (FANUY) rising 2%, and Casio Computer Co. (CSIOY) adding
4.1%.
But shares of Toshiba Corp. (TOSYY) dropped 3.5% after its
profit growth fell short of expectations.
Resona Holdings Inc. (8308.TO) added 1.7% after the Nikkei
reported the financial-services firm planned in five years to repay
the public funds it owes the government.
Daikin Industries Ltd. (DKILY) soared 7.3% after the company
posted an increase in annual profit.
In Seoul, banks were climbing after the Bank of Korea's
interest-rate cut by a quarter-point to 2.5%, where most economists
had expected no change.
Shares of KB Financial Group Inc. (KB) rose 2.8%, and Shinhan
Financial Group Co. (SHG) gained 3.1%.
In Sydney, shares of retailers edged up after the local economy
added as many as 50,100 jobs in April, trouncing expectations for
an addition of 12,000 jobs. The data came after 36,000 jobs were
lost in March.
Shares of Woolworths Ltd. (WOLWF) rose 0.6%, and Harvey Norman
Holdings Ltd. inched up 0.4%.
"Looking through the noise, it does appear that employment has
improved since the beginning of this year," HSBC's Australia and
New Zealand chief economist Paul Bloxham wrote to clients in a
report.
"The labor-force data are providing some evidence that the soft
patch in growth may be behind us. Recent indicators also suggest
that [first-quarter gross domestic product] is likely to be strong.
The Reserve Bank of Australia may not need to ease any further,"
Bloxham said.
Advancers also included News Corp. (NWS), shares of which climbed 3.3%.
The media conglomerate posted fiscal-third-quarter earnings
excluding items of 36 cents a share, beating analyst expectations
by 1 cent a share. Revenue totaled $9.54 billion, ahead of
projections of $9.14 billion. News Corp. is the owner of
MarketWatch, the publisher of this report.
Also on the Australian market, Billabong International Ltd.
(BBG.AU) has requested its shares be suspended from quotation,
pending an announcement related to transactions affecting the
surfwear retailer, which has been in takeover talks.
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