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Asian shares fall on China PMI data

Asian shares fall on China PMI data

Asian shares declined on Monday in morning session after a private gauge of Chinese manufacturing contracted for a fourth month, missing analysts’ estimates.

The MSCI Asia Pacific excluding Japan Index slipped 0.3% to 474 at 9:57 a.m. in Hong Kong, following three weeks of losses. Markets in Japan and South Korea are closed today and tomorrow for holidays.

The HSBC Holdings Plc/Markit Economics Ltd. gauge of China manufacturing fell to 48.1 from a preliminary reading of 48.3, signalling a contraction. Economists forecast a reading of 48.4.

In addition to the poor PMI data, there were concerns over excessive supply of new stocks hitting the market after the Chinese securities regulator on Sunday evening unveiled prospectuses of 25 applicants for initial public offerings.

China’s Premier Li Keqiang is trying to avoid a deeper slowdown after property construction plunged in the first quarter and growth cooled. Chinese economic output is projected to expand 7.3% this year, the weakest pace since 1990, as the government reins in credit.

Meanwhile, unrest intensified in Ukraine’s east. Ukrainian soldiers took back a television tower in the Donetsk area at the weekend, after it was seized by pro-Russian forces, Interior Minister Arsen Avakov said on his Facebook feed.

Australia’s S&P/ASX 200 Index fell 0.2% and Hong Kong’s Hang Seng Index lost 0.9%. China’s Shanghai Composite slid 0.7% and Singapore’s Straits Times Index was little changed. New Zealand’s NZX 50 Index slid 0.5%, while Taiwan’s Taiex index fell 0.1%.

The poor sentiment towards banks in Australia continued into a second week as investors in Westpac Banking ignored a set of strong earnings, with the stock last down 1.3%. The Australian bank increased its first-half profit by 10%, beating expectations, as lending continued to grow and impairment charges fell.

Also in Australia, iron ore and coal miner Aquila Resources surged 37% on news that China's Baosteel Group and Australian freight operator Aurizon Holdings are readying a bid on the company that values it at around US$1.3 billion.

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