Asian shares steady, China flash HSBC PMI eyed

TOKYO Tue Apr 23, 2013 6:08am IST

Men look at a stock index board as passersby walk past outside a brokerage in Tokyo, April 16, 2013. REUTERS/Toru Hanai

Men look at a stock index board as passersby walk past outside a brokerage in Tokyo, April 16, 2013.

Credit: Reuters/Toru Hanai

Related Topics

TOKYO (Reuters) - Asian shares steadied on Tuesday, supported by overnight gains in global equities, but were capped ahead of China's first economic report for the second quarter due later in the session.

News overnight of weaker-than-expected U.S. existing home sales added to worries over the growth prospects of growth in the U.S. economy, focusing even more scrutiny on the China data.

HSBC's flash PMI manufacturing activity for April due at 0145 GMT will offer a preliminary insight into China's economic conditions in the second quarter, after first quarter growth fell short of market expectations.

"Consensus is for a headline of 51.5, effectively steady versus the final March reading of 51.6. We see the risks of a surprise evenly balanced," said Sean Callow, a senior currency strategist at Westpac Banking Corp in Sydney.

Recent U.S. and Chinese economic reports which were weaker than forecast triggered a sharp sell-off across asset classes last week, disrupting markets that had rallied on growing optimism about steady global recovery.

On Tuesday, MSCI's broadest index of Asia-Pacific shares outside Japan was steady, with Australian shares inching up 0.1 percent while South Korean shares opening down 0.1 percent.

Japan's Nikkei stock average opened down 0.2 percent after surging as much as 2.2 percent to nearly five-year highs on Monday, cheering the G20's acceptance of Japan's stimulus drive as paving the way for the yen to weaken further --improving prospects for Japanese corporate earnings.

The dollar was trading around 99.30 yen, having failed to top the key 100 yen mark on Monday despite coming close to rise as high as 99.90 yen. The weak U.S. housing data weighed on the dollar but traders say the upcoming Bank of Japan meeting on Friday may provide another opportunity to clear that symbolic level.

"After expanding its bond purchasing program to 7 trillion yen earlier this month, the BOJ may stick to the sidelines this time around, but Governor Haruhiko Kuroda may broaden the scope of the non-standard measure to include a greater range of asset classes in an effort to encourage a stronger recovery," said David Song, analyst at DailyFX.

The BOJ's reflationary plans were accepted by the Group of 20 gatherings in Washington late last week. The dollar hit a four-year peak of 99.95 on April 11. Heavy option barriers lined up around 100 yen have blocked the dollar's smooth climb against the yen, but if and when the 100 level is broken, traders expect stop-loss buying to lift the dollar even higher.

The dollar firmed against the euro, which traded down 0.1 percent at $1.3057, weighed by comments by European Central Bank policymakers on Monday stressing falling inflation and poor growth prospects in the euro zone, which suggest the bank may be leaning towards a rate cut.

Signs of progress to break political stalemate in Italy outweighed fresh downbeat earnings news and concern over the health of the global economy, helping European shares to inch higher on Monday.

Cash gold recovered most of its loss after last week's tumble. Spot gold was at $1,423.04 an ounce, moving away from a two-year low of $1,321.35 touched last week, but still some $50 below the closing level before the sell-off began.

Brent crude futures rose for a third straight session on Monday. U.S. crude was up 0.2 percent at $89.38 a barrel early on Tuesday. <O/R>

USEFUL LINKS:

Asset returns in 2013: link.reuters.com/dub25t

Economic growth since 2008: link.reuters.com/tyd36t

G4 Central Bank Activity: link.reuters.com/gaj75t

(Additional reporting by Ian Chua in Sydney; Editing by Eric Meijer)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Diplomacy

REUTERS SHOWCASE

Maruti Results

Maruti Results

Maruti Suzuki says profits helped by sentiment, not growth.  Full Article 

Tracking the Monsoon

Tracking the Monsoon

Monsoon turns patchy after revival.  Full Article 

ICICI Profit Up

ICICI Profit Up

ICICI Bank Q1 net profit up 17 percent, beats estimates.  Full Article 

Pharma Sector

Pharma Sector

FDA raises concern over drug production process at Cadila  Full Article 

Coal India

Coal India

Some Coal India mines may be run by foreign firms - minister  Full Article 

Fuel Prices

Fuel Prices

IOC to cut petrol prices by 1.5 pct from Friday  Read 

Economic Pulse

Economic Pulse

India's infrastructure output growth hits 9-month high in June  Full Article | Related Story 

Joint Bid

Joint Bid

ONGC, Oil India bid $1.5 bln for stake in Murphy Oil's Malaysia assets - sources  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage