By Mia Lamar and Daniel Inman
Stocks in Hong Kong fell on signs of further contraction in
China's manufacturing sector, while a rally on Wall Street
bolstered Japan in a quiet, holiday-shortened week for regional
markets.
A strong session for U.S. stocks that sent the S&P 500 (SPX)
to its sixth-straight positive close drove sentiment in Australia
and Japan. The S&P 500 gained 0.4% on Tuesday to 1879.55,
notching its longest winning streak since mid-September.
A string of upbeat U.S. corporate earnings reports "have again
been the perfect distraction from concerning lofty tech
valuations," said Timothy Radford, global investment manager at
Australian brokerage Rivkin, referring to a sharp selloff of
highflying technology stocks that has rattled global markets over
the past month.
Japan's Nikkei 225 index rose 1.1% to 14,546.27. Gains came as
the U.S. dollar was little changed against the yen, trading at
Yen102.53 versus Yen102.61 late Tuesday in New York. The beginning
of U.S. President Barack Obama's three-day state visit to Japan was
on the radar in Tokyo as traders watched for any progress on trade
talks.
Japanese railroad and hotel-chain operator Seibu Holdings Inc.
traded higher in its return as a public company, gaining 10.6% over
its initial public offering price. The company's core entity, Seibu
Railway Co., was delisted from the Tokyo Stock Exchange in December
2004 for doctoring its financial statements.
In Australia, the S&P/ASX 200 rose 0.7% to 5517.80.
Elsewhere, negative economic data from China weighed on markets,
as manufacturing activity in the region's largest economy showed
another month of contraction. A preliminary report from HSBC on
China's manufacturing sector in April came out at 48.3 from a final
reading of 48.0 in March, remaining below the 50 mark that
distinguishes expansion from contraction.
Hong Kong's Hang Seng Index fell 1% to 22509.64 and the Shanghai
Composite was off 0.3% at 2067.38.
Disappointing earnings from blue-chip Chinese companies also
weighed on stocks in Hong Kong and Shanghai. Shares of China Mobile
Ltd. (CHL) , the world's largest telecom carrier by subscribers,
fell 2.6% in Hong Kong after the company said intensifying
competition and handset subsidies for Apple Inc.'s (AAPL) iPhones
hurt its first-quarter earnings.
"Domestic demand showed mild improvement and deflationary
pressures eased, but downside risks to growth are still evident as
both new export orders and employment contracted," HSBC economist
Qu Hongbin said.
South Korea's Kospi lost 0.2% to 2000.37 and Singapore's Straits
Times Index was 0.8% lower late in Asia.
More MarketWatch news:
Asia Stocks blog: China data back in spotlight
Chinese factory data show mild rebound
Companies say it's tougher to keep skilled employees
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