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Asia report: Japan leads stocks lower amid poor manufacturing data

By Josh White

Date: Wednesday 01 Apr 2020

Asia report: Japan leads stocks lower amid poor manufacturing data

(Sharecast News) - Most markets in Asia finished weaker on Wednesday, led lower by equities in Tokyo, as fresh manufacturing data there put a dent in sentiment amid the Covid-19 coronavirus pandemic.
In Japan, the Nikkei 225 was down 4.5% at 18,065.41, as the yen strengthened 0.07% against the dollar to last trade at JPY 107.47.

Of the major components on the benchmark index, automation specialist Fanuc was down 6.58%, fashion firm Fast Retailing lost 5.07%, and technology conglomerate SoftBank Group was off 2.98%.

The broader Topix index was 3.7% weaker by the end of trading in Tokyo, closing its session at 1,351.08.

Fresh data out of Japan showed a disastrous first quarter for the country's manufacturing sector, with the Bank of Japan's Tankan survey of big manufacturers coming in at -8 for the three months through March.

That was the lowest level since the first quarter of 2013, but was still better than analysts polled by Reuters had been expecting, which was for a reading of -10.

On the mainland, the Shanghai Composite slipped 0.57% to 2,734.52, and the smaller, technology-centric Shenzhen Composite was off 0.35% at 1,660.08.

The unofficial Caixin/Markit manufacturing purchasing managers' index somewhat backed up Beijing's official data for March on Wednesday, coming in at 50.1.

That was above Reuters-polled expectations for a reading of 45.5, and was a decent recovery from the 40.3 reading for February, taking it back above the 50-point level that separates expansion from contraction.

The government's official data, released on Tuesday, also suggested a recovery for the sector in March, coming in at 52 after February's authoritarian lockdowns in many parts of the country in a bid to contain the spread of Covid-19.

"The Chinese Caixin PMI showed that Chinese manufacturing rebounded in March, however this news is being overshadowed by sharp falls in manufacturing in exporter nation Japan and South Korea," said Nigel Frith, senior market analyst at AskTraders.

"The fact is the numbers are likely to get worse before they get better as they are dependent on demand from Europe and [the] US, which will slow considerably."

South Korea's Kospi lost 3.94% to finish the day at 1,685.46, while the Hang Seng Index in Hong Kong was 2.19% lower at 23,085.79.

Hong Kong-listed shares of London-based lenders HSBC and Standard Chartered were down 9.51% and 7.64%, respectively, after both banks cancelled their dividends following pressure from UK regulators.

Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 4.08% and chipmaker SK Hynix sliding 5.88%.

Oil prices were mixed as the region went to bed, with Brent crude last down 2.45% at $25.72 per barrel, while West Texas Intermediate was up 0.58% at $20.60.

In Australia, the S&P/ASX 200 bucked the regional trend to close up 3.58% at 5,258.60.

Across the Tasman Sea, New Zealand's S&P/NZX 50 was also in positive territory, rising 1.32% to 9,926.08.

The gains were led by firms that had been hit hard by coronavirus-fuelled selloffs, with casino operator SkyCity Entertainment up 9.1% and airport operator AIAL ahead 5.2%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 1.1% at AUD 1.6471, and the Kiwi retreating 0.84% to NZD 1.6908.

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