Asian stocks pared gains after a Chinese manufacturing report signaled persisting weakness in the world’s second-largest economy.
China Overseas Land & Investment Ltd., the largest mainland developer traded in Hong Kong, sank 3.4 percent, leading declines on the Hang Seng Index. China Mobile Ltd. fell 2.5 percent after the world’s biggest phone company posted its third straight drop in quarterly profit. Resona Holdings Inc. climbed 2.5 percent after Greenlight Capital Inc., a hedge fund run by David Einhorn, said it bought shares in the Japanese lender.
The MSCI Asia Pacific Index added 0.1 percent at 138.79 as of 2:15 p.m. in Hong Kong, trimming gains of as much as 0.6 percent. The preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was 48.3 in April, matching the median estimate of analysts surveyed by Bloomberg News. While that was higher than the final March figure of 48, the reading remains below the level of 50 that is the dividing line between expansion and contraction.
“Asian indices are coming off their highs as Chinese manufacturing data continue to contract,” Desmond Chua, a Singapore-based strategist at CMC Markets said by phone. “It seems China’s 7.5 percent GDP growth target is too optimistic.”
China’s Shanghai Composite Index (SHCOMP) lost 0.5 percent, while the Hang Seng China Enterprises Index of mainland stocks traded in Hong Kong declined 1.3 percent. The city’s benchmark Hang Seng Index dropped 0.9 percent.