Asia report: Markets mixed as China PMI surprises

Markets in Asia finished mixed on Tuesday, after data from China suggested the manufacturing economy had lifted itself from its autumn rut.

Japan’s Nikkei 225 was up 0.1% at 17,442.40, after the Bank of Japan held steady on monetary policy and kept interest rates at -0.1%, with the pace of bond purchases also stable.

The central bank did cut its core consumer inflation forecast, however, to 1.5% from 1.7% for the year to March 2018.

On the corporate front, Honda Motor was down 2.04%, a day after the carmaker confirmed a 38% year-on-year increase in second quarter operating profit.

It also raised its full-year profit guidance 6% to JPY 415bn.

“Investor views remain split on how much Honda is capable of recovering its profitability,” noted Jefferies equity analyst Takaki Nakanishi.

“Yet we think this was a solid result, a first step towards normalization of the Takata problem and the start of normalization in sales in various regions.”

Electronics maker Panasonic was still under pressure as well after cutting its full-year sales and profit forecasts on Monday, by almost 21% for the 12 months to 31 March to JPY 245bn.

Panasonic shares were down 6.47% on Tuesday.

Sony shares were off 0.71% as investors reacted to losses arising from the sale of its battery business, and its restructure to shift focus to core money-making areas such as entertainment production and video gaming.

The yen was last 0.18% weaker against the greenback, at JPY 105.01 per $1.

On the mainland, the Shanghai Composite added 0.69% to settle at 3,122.03, while the Shenzhen Composite was up 1.11% at 2,073.11.

China’s official purchasing managers’ index was released on Tuesday morning, alongside the private Caixin manufacturing PMI reading.

The official measure from Beijing was broke a two-month flat streak, beating forecasts with 51.2, while the Caixin survey was also at 51.2.

Hong Kong’s Hang Seng Index added 0.93% to 23,147.07, although debut stock Cofco Meat saw its price slide 24% within 30 minutes of first trade.

In South Korea, the Kospi was down 0.04% at 2,007.39, as serious allegations swirled around president Park Geun-hye.

Prosecutors on the peninsula launched an investigation, after it was alleged that friend of president Park, Choi Soon-sil, had exerted undue influence over state affairs, access classified materials and received benefit from non-profit foundations.

Oil prices were mixed after Asian trading, with Brent crude last up 0.14% at $48.65 per barrel and West Texas Intermediate losing 0.39% at $46.68.

In Australia, the S&P/ASX 200 was down 0.51% to 5,290.50, with the hefty financials and energy subindexes dragging the benchmark lower, as they weighed 0.54% and 0.52% respectively.

During the day, the Reserve Bank of Australia confirmed market expectations that it would leave the country’s official cash rate unchanged at 1.5%.

The central bank cited mixed employment measures and subdued inflation pressures as being behind its decision.

Navarre Minerals was a winner, however, rising 4.76% after it announced it has received commitments to raise AUD 747,000 through a share issue.

New Zealand’s S&P/NZX 50 fell 0.4% to settle at 6,930.49, with subscription broadcaster Sky the worst performer after the country’s Commerce Commission said it was delaying a decision on whether to allow Vodafone a reverse takeover of the firm.

The regulator said it was talking to the two companies about the extension, saying it wasn’t yet satisfied the tie-up wouldn’t substantially reduce competition.

Sky in New Zealand is no longer a related company to the British-based broadcaster of the same name.

The down under dollars were both stronger, with the Kiwi last ahead 0.36% at NZD 1.3938 against the greenback and the Aussie strengthening 0.84% to AUD 1.3031 per $1.