GLOBAL MARKETS-Asian stocks waver after China PMI disappoints

Tue Jul 23, 2013 11:43pm EDT

* MSCI Asia ex-Japan up slightly after previous session's
rally
    * HSBC flash PMI falls short, shows China manufacturing
sluggish
    * Australian dollar wilts after tame inflation data

    By Lisa Twaronite
    TOKYO, July 24 (Reuters) - Asian stock markets wobbled on
Wednesday, while the dollar took back some ground after the
latest reading on China's manufacturing activity showed activity
slowed to an 11-month low in July as new orders faltered and the
job market darkened.
    The flash HSBC/Markit Purchasing Managers' Index for China
fell to 47.7 this month from June's final reading of 48.2,
marking a third straight month below the 50 threshold between
expansion and contraction. 
    "The lower reading of the July HSBC Flash China
Manufacturing PMI suggests a continuous slowdown in
manufacturing sectors thanks to weaker new orders and faster
destocking," said Hongbin Qu, chief China economist of HSBC.
    "This adds more pressure on the labour market," he said.
    Worries of a rapid slowdown in the world's second-biggest
economy as well as expectations that the U.S. Federal Reserve
will begin to trim its massive bond-buying stimulus later this
year have rattled global markets in recent weeks.    
    MSCI's broadest index of Asia-Pacific shares outside Japan
 pared earlier gains and wavered in and out of
negative territory.
    Japan's Nikkei share average fell 0.6 percent,
giving back some of its two-day rally, after government data
showed the country's export growth unexpectedly slowed in June
from a year earlier. The figures were a worrying sign that
China's slowing economy hurt overseas demand and could
potentially threaten Japan's economic recovery. 
    In U.S. trading on Tuesday, the S&P 500 snapped a
four-session winning streak and retreated from Monday's record
closing high, while upbeat results from United Technologies
bolstered the Dow, which also touched a record intraday high. 
   
    The Australian dollar also erased its early gains
against its U.S. counterpart and skidded 0.4 percent to $0.9260,
after tame inflation data left the door open for the Reserve
Bank of Australia to cut interest rates next month if it
chooses. 
    "If the RBA thinks the economy needs a stimulus hit, these
data are completely consistent with that. Our view is that
growth is slowing in the economy. So we would expect the RBA to
cut rates in August," said Brian Redican, a senior economist at
Macquarie.
    Yields on U.S. benchmark 10-year Treasury notes 
rose to 2.519 percent from their U.S. close of 2.507 percent,
though still well below a two-year high of 2.76 percent touched
on July 8.
    The euro slipped slightly after the China data to
$1.3207, after rising as high as $1.3238 on Tuesday, its highest
level since June 21.
    Against the yen, the dollar took back some lost ground,
rising 0.3 percent to 99.74 yen, moving away from a
one-week low of 99.13 yen touched in the previous session.
    The dollar index extended gains, adding 0.2 percent
to 82.126, after it skidded to a one-month low of 81.926 on
Tuesday. The index set a three-year high of 84.753 last week.
    Commodity markets had pushed higher ahead of the China data,
but those gains unravelled in its wake. 
    Copper dropped 0.8 percent to $6,982 a tonne , 
after earlier touching a session high of $7,060, its loftiest
since June 18. U.S. crude fell 0.3 percent to $106.96 a
barrel.
    Spot gold remained above the $1,300 an ounce after
rallying to a one-month high on Tuesday.
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