* Asian stocks soft, following subdued Wall St
* Worries about Fed exit plan back at fore after Fed
* China HSBC June manufacturing PMI hits 9-mth low, official
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, July 1 Asian equities edged
lower on Monday, hurt by worries that the U.S. Federal Reserve
could start scaling back its massive monetary stimulus in
September and signs of an economic slowdown in China.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.5 percent, having last week posted a 2.8
percent rally, its biggest weekly gain since September 2012. The
index, though, ended the first half of the year down 7.3
The MSCI index has retreated since hitting a 21-month high
in early May, as investors began to fret that the U.S. central
bank might start tapering its massive bond-buying later this
year and lead to a slowdown in inflows into Asian assets.
"I don't think this corrective mode will end immediately,"
said Satoshi Okagawa, senior global markets analyst for Sumitomo
Mitsui Banking Corporation in Singapore.
Besides the growing speculation about a possible scaling
back of the Fed's quantitative easing, worries about Chinese
economy's outlook may weigh on Asian equities in the near-term,
China's factory activity reached its lowest in nine months
in June as new orders fell despite price cuts by producers, a
private survey showed on Monday, reinforcing signs of an
economic slowdown in the second quarter.
The HSBC/Markit Purchasing Managers' Index (PMI) for June
retreated to 48.2, the lowest level since September 2012 and
down from May's final reading of 49.2.
A separate PMI survey released by China's government
statistics office earlier on Monday was less dour. Its index
slipped to 50.1 in June from 50.8 in May, but came in above the
median market forecast of 50.0.
Tokyo's Nikkei share average slipped 0.5 percent,
after having climbed 3.4 percent last week. The Nikkei, however,
is still up more than 30 percent since the end of last year.
Optimism that Prime Minister Shinzo Abe's aggressive
stimulus push will lift the economy has helped light a fire
under the Nikkei.
Data on Monday suggested Abe's plans are on track with a
survey showing the mood of Japanese manufacturers turning
positive for the first time in nearly two years.
Monday's market moves followed a subdued finish on Wall
Street after Fed Governor Jeremy Stein suggested that September
could be an opportune time for the central bank to consider
scaling back its massive asset-purchase programme.
Stein's remarks, echoed by President of the Richmond Fed,
Jeffrey Lacker, undid some of the calm that spread through
markets last week after several other officials sought to play
down market fears of the Fed's plan to taper stimulus.
Critical for markets this week is the U.S. jobs data due on
Friday, given it is a key measures the Fed will consider before
deciding to start withdrawing stimulus.
In currency markets, the dollar held near a one-month high
against a basket of major currencies. The dollar index stood at
83.157, not far from Friday's high of 83.344, its highest
level since early June.
Against the yen, the dollar hit a one-month high of 99.55
yen, and was last up 0.2 percent on the day at 99.31 yen.
The Australian dollar touched a near three-year low against
the U.S. dollar earlier on Monday, but later regained a bit of
ground, getting some support after China's official PMI was less
dire than expected.
The Australian dollar rose 0.4 percent to $0.9172.
Earlier, it fell to $0.9110, its lowest level since September
Spot gold was up around 0.5 percent at $1,239.31 per
ounce, still not far off a near three-year trough of $1.180.71
plumbed on Friday. Worries about the end of the Fed's stimulus
had contributed to the panic selling of the precious metal.
U.S. crude fell 0.4 percent at $96.16 a barrel.