Asia: Stocks decline after revised Chinese PMI

Asian stocks started the week on the red following disappointing Chinese data and ongoing concerns over the Greece situation.

Shanghai was the most affected stock of the day, falling by 2.56% after HSBC’s purchasing managers’ index (PMI) for China manufacturing was unexpectedly revised lower to 49.7 in January from an earlier estimate of 49.8.

Jim Reid from Deutsche Bank said: “Our China team expects the government to loosen monetary policy aggressively in H1 with two interest rate cuts and two reserve ratio cuts expected over the full year.”

Nikkei 225 was also down by 0.66% and Hong Kong’s Hang Send fell 0.09%.

Greek finance minister Yanis Varoufakis has said the nation needs the European Central Bank’s assistance to bolster banks.
He also said the nation will not accept any more aid under its existing bailout agreement.

“We believe that the likelihood of a Greek exit is now significantly higher than at any point in 2012, in view of the latest political events,” according to Barclays Research analysts Philippe Gudin and Rajiv Setia.

On a more positive note, Australia’s ASX rose 0.66% driven by an improvement in performance of manufacturing index to 49 in January from 46.9 the month before.