Asia: Mixed stocks following Chinese GDP growth target cut and RBA governor speech

Asian stocks were mixed on Thursday following the lead from a weaker finish for US stocks the night before.

In mainland China, the Shanghai Composite fell 1.3% while Hong Kong’s Hang Seng declined 1.11%.

The losses follow news that China confirmed its weakest growth target in more than 15 years as it expects greater economic headwinds in 2015 than last year.

China's gross domestic product (GDP) growth target was set at 7% for 2015, down from 7.5% in 2014.

On Wednesday, data compiled by HSBC and Markit showed that China’s purchasing managers’ index (PMI) for the services sector rose to 52, from the six-month low of 51.8 in January.

A sub-index for new orders rose to 52.2 in February from 51.2 in January and the sub-index measuring new business also rose.

Hong Kong’s solar power generation company Hanergy Thin Film Power Group gained 14.53% and Chinese Chongqing Water Group rose 0.33% following an anti-pollution documentary in China. Coal mining China Shenhua Energy fell 2.18%.

Elsewhere in Japan, Nikkei 225 gained 0.26% despite a decrease in services PMI to 48.5 in February from 51.3 the month before.

Ono Pharmaceutical gained 7.73% after receiving approval for a new cancer treatment, while Sony rose 0.58%.

Australia’s ASX was up 0.04% as the deputy governor of the Reserve Bank of Australia, Philip Lowe, confirmed further stimulus may be implemented to assist the economy as upward pressure on an already strong Australian dollar had affected the recovery.

Lowe said in Sydney: “Global developments have left us with a higher exchange rate and lower interest rates than would otherwise have been the case.”

“We may not like this configuration, but developments abroad give us little choice.”

Australian retail sales rose in January to 0.4% in line with expectations, from 0.2% the month before. However, the trade balance dropped to -$980m from -$503m in December. Forecasts expected a balance of -$950m.

Furthermore, data released on Wednesday showed the country grew at just 0.5% in the last quarter of 2014, below the consensus estimate at 0.6%, but up from an upwardly revised 0.4% in the prior quarter. The year-to-year growth rate was 2.5%, the slowest pace in four quarters.