* China PMI meets consensus forecasts, Hk shares fall
* Aussie plunges after inflation surprisingly low
* Risk sentiment bolstered by gains in US, Europe
* Major currencies in tight range
By Wayne Cole and Vidya Ranganathan
SINGAPORE, April 23 China's stock markets fell
again on Wednesday after a survey showed manufacturing activity
in the world's second-biggest economy was still contracting in
April, while the Australian dollar tumbled to a two-week low
after data showed surprisingly low inflation.
Overall, however, trading across most asset markets in Asia
remained surprisingly subdued, with MSCI's broadest index of
Asia-Pacific shares outside Japan showing little
The sobering economic news on China came after stocks in
Europe and Wall Street enjoyed merger-driven gains on Tuesday.
Financial spreadbetters expected European shares will pause
after those gains, forecasting Britain's FTSE 100 and
France's CAC 40 to open flat, and Germany's DAX
down 0.3 percent.
Investors hoping that the Chinese HSBC manufacturing PMI
for April would show some stabilisation in the slowing economy
were relieved when the survey came in at 48.3, still in
contractionary territory but slightly above the March number.
Still, both the Shanghai Composite Index and the
China Enterprises Index of the leading offshore Chinese
listings in Hong Kong weakened, hurt by a sell-off in telecoms
shares after the mainland's biggest carrier China Mobile posted
its third straight quarterly decline in profits.
The HSCE fell 1.3 percent, taking its total losses to 5
percent in under two weeks.
The Aussie fell after data showing Australian consumer price
inflation was a surprisingly low 0.6 percent last quarter.
The currency slid more than one U.S. cent to
$0.9277 in reaction to the soft inflation reading. Interbank
futures <0#YIB:> rallied as the market pared back the risk that
the Reserve Bank of Australia will have to raise interest rates
before the year-end.
"The fall in the Aussie was quite large considering that
interest rate markets weren't pricing a hike until mid-2015
anyway," said Sean Callow, currency strategist at Westpac.
"The slide gives the impression that Aussie bears have been
waiting for a reason to bash it and are jumping on the
Australia already has high yields relative to its rich world
peers which, combined with improving economic data, has been
attracting offshore money into the local dollar.
Elsewhere in Asia, Japan's Nikkei gained 0.8 percent
while Australia's main index edged up 0.7 percent.
The better mood owed much to Wall Street where the Dow
rose 0.4 percent, while the S&P 500 gained 0.41
percent and the Nasdaq 0.97 percent.
The FTSEurofirst 300 index of top European shares
jumped 1.34 percent on Tuesday.
CHINA INFUSES CASH
China's stock markets have been hit by concerns about a
potential share oversupply after the securities regulator
released a raft of prospectuses from new firms planning to list,
marking the end of a lull in new listings.
The total number of firms that announced plans for IPOs in
the past four days alone has risen to 64. China halted new
listings for 14 months from late 2012, in what some analysts
said was a bid to shield sluggish domestic equity markets from
further downward pressure
On Tuesday, China's central bank said it will cut the amount
of deposits rural banks must hold as reserves by between 0.5 and
2 percentage points, the latest in a series of measures to help
combat a slowing economy.
"The impact of a selective RRR cut is still limited as it
will only inject as much as RMB100 billion liquidity into the
system," noted analysts at ANZ.
"We would treat the move as a signal which reflects that the
accommodative monetary policy stance will be maintained over the
foreseeable future, given that the real economy is expected to
remain lukewarm and inflation pressures are mild."
The yuan hit a 16-month low against the dollar on
Wednesday, extending a losing trend that stems from the central
bank's guidance for the currency and a policy aimed at detering
The U.S. dollar was otherwise sidelined at 102.50 yen
and $1.3814 per euro, having held to tight ranges for
some days now.
In the United States and Europe all the talk was of mergers,
this time in the pharmaceutical sector.
AstraZeneca climbed 4.7 percent after the Sunday
Times newspaper reported that Pfizer approached its
British rival with a 60 billion pound ($101 billion) takeover
offer. Pfizer rose 1.2 percent to $31.23.
GlaxoSmithKline rose 5.2 percent after it agreed to
sell its oncology products to Novartis for $14.5
billion. Novartis' shares added 2.3 percent.
In commodity markets, Brent crude held above $109 a
barrel, just off a six-week high of $110.36 last week, cushioned
by continued concerns over the stand-off in Eastern Ukraine.
U.S. crude added 11 cents to $101.86 a barrel.
Gold remained out of favour after touching its lowest in
more than two months on Tuesday, weighed down by gains in Wall
Street stocks and as outflows from physical gold funds pointed
to weak investment appetite.
Early Wednesday, spot gold was trading at $1,284.4 an
ounce, just off a trough of $1,277.10.
(Editing by Chris Gallagher & Shri Navaratnam)