Asia stocks muted as China manufacturing wanes

Associated Press

TOKYO (AP) — Asian stock markets were muted Tuesday as manufacturing surveys suggested China's economy slowed in the first quarter.

The Nikkei 225, the main index for the Tokyo Stock Exchange, was down 0.2 percent at 14,801.69. Japan's sales tax on Tuesday rises to 8 percent from 5 percent, a change needed to help stabilize government finances but also a possible setback for consumer demand and economic recovery.

Asian markets were dampened by two surveys that showed weakness in China's manufacturing.

A factory purchasing managers' index released by the National Bureau of Statistics ticked up slightly to 50.3 in March from 50.2 in February.

Separately, HSBC's index fell to 48.0 from 48.5, slightly worse than a preliminary report and its third consecutive monthly drop. Both indexes use a 100-point scale on which numbers above 50 indicate expansion.

HSBC said its reading implies that first quarter economic growth likely fell below the 7.5 percent rate that China's leaders have targeted for the full year.

Hong Kong's Hang Seng was up 0.6 percent to 22,287.10 and Seoul's Kospi was little changed at 1,986.30. Australia's S&P/ASX 200 fell 0.4 percent to 5,373.90. China's Shanghai Composite rose 0.1 percent to 2,035.18.

On Wall Street, the Standard & Poor's 500 rose 14 points, or 0.8 percent, to close Monday at 1,872 after Federal Reserve Chair Janet Yellen said U.S. interest rates would stay low for some time. The Dow Jones industrial average rose 134 points, or 0.8 percent, to 16,457. The Nasdaq composite rose 43 points, or 1 percent, to 4,199.

The Fed is reducing its bond buying program but maintaining low interest rates would help keep the U.S. economic recovery going.

In currencies, the euro dropped to $1.3773 from $1.3776 late Monday. The dollar rose to 103.28 yen from 102.20 yen.

Benchmark U.S. crude for May delivery was down 27 cents at $101.31 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 9 cents to $101.58 on Monday.