Asian stocks dropped this week, with utilities and materials producers leading declines, after China’s manufacturing data signaled persisting weakness in the world’s second-largest economy.
Anhui Conch Cement Co (安徽海螺水泥股份), China’s top cement producer, dropped 6 percent this week, while Japan’s Kansai Electric Power Co slid 7 percent after saying it may take a long time to restart its nuclear reactors due to safety precautions and China Mobile Ltd (中國移動) fell 4 percent after the world’s No. 1 phone company posted its third straight drop in quarterly profit.
Defying the regional slump was Taiwan’s Largan Precision Co (大立光), which supplies lenses for Apple Inc’s iPhones and iPads, and surged to a record in Taipei after Apple reported second-quarter revenue and profit that beat expectations.
On Friday, Largan Precision rose 17 percent to NT$1,875, while Catcher Technology Co (可成科技), which makes casings for Apple, climbed 8.2 percent to NT$256.50.
The MSCI Asia Pacific Index fell 0.7 percent to 138.17 this week, as the preliminary Purchasing Managers’ Index from HSBC Holdings PLC and Markit Economics signaled a fourth month of contraction in Chinese factory activity this month.
“Concerns about China’s slowdown and escalating tensions in Ukraine are keeping people from being bullish,” said John Vail, chief global strategist at Nikko Asset Management Co. “Asia is a little bit more sensitive to these things.”
In Taipei, the TAIEX sank 2.1 percent over the week as the standoff over whether to finish building the Fourth Nuclear Power Plant in New Taipei City’s Gongliao District (貢寮) pushed up electricity prices.
After President Ma Ying-jeou (馬英九) failed to strike an agreement on Friday on the plant with Democratic Progressive Party Chairman Su Tseng-chang (蘇貞昌), stocks fell the most in 11 weeks. Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest custom chipmaker, lost 2.1 percent and HTC Corp (宏達電) fell 3.5 percent.
After touching its highest level since June 2011 this week, the TAIEX lost 1.92 percent to close at 8,774.12 on Friday, compared with 8,966.66 on April 18.
“Investors are using the nuclear talks as an excuse to take profit,” Capital Securities Co’s (群益證券) Diana Wu said by telephone from Taipei. “The rationale is: If you shut down the plant, there will be a shortage of electricity, which will lead to higher costs of companies and higher inflation, dragging on the economy.”
The TAIEX trades at 14.7 times estimated earnings, compared with 10.8 for the MSCI Emerging Markets Index.
Across the Taiwan Strait, China’s Shanghai Composite Index declined 2.9 percent this week on the back of the HSBC-Markit survey results.
The survey of China manufacturing had a preliminary reading of 48.3 for this month, matching the median estimate of analysts surveyed by Bloomberg and rising from last month’s final figure of 48. Readings below 50 signal contraction.
There are “now expectations that the target of 7.5 percent Chinese GDP growth for this year might be the top end of guidance,” Patersons Securities Ltd economist Tony Farnham said from Perth.
Chinese Premier Li Keqiang (李克強) has said Beijing is not considering “strong” stimulus and reiterated that economic growth a bit higher or lower than the official goal is within a reasonable range.
Elsewhere in Asia this week, South Korea’s KOSPI slid 1.6 percent, Singapore’s Straits Times Index added 0.4 percent and the BSE Sensex rose 0.3 percent in Mumbai.
The Hang Seng China Enterprises Index of Chinese shares traded in Hong Kong slipped 2.8 percent, while the territory’s benchmark Hang Seng Index lost 2.4 percent.
In Tokyo, the TOPIX lost 0.3 percent this week after a report on Friday showed that the Japanese capital’s consumer prices this month rose 2.7 percent from a year earlier to post their biggest jump since 1992 driven by a sales tax increase and a year of unprecedented stimulus from the Bank of Japan.
Meanwhile, Australia’s S&P/ASX 200 Index climbed 1.4 percent to its highest since June 2008, while New Zealand’s NZX 50 Index advanced 1 percent in a week shortened by holidays.
In other markets on Friday:
Manila slipped 0.69 percent, or 46.23 points, from Thursday to close on 6,685.10.
Wellington was closed for a public holiday.
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