Saturday, September 1, 2012

Asia Markets Rise; Infosys Slides

Asian stock markets generally rose Friday, as cooler-than-expected Chinese growth strengthened expectations that Beijing could ease its monetary policies further.

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But India's stock market fell after software bellwether Infosys delivered a weak revenue outlook for the fiscal year that began April 1.

China's rate of economic growth slowed to 8,1% in the first quarter, down from the 8.3% that economists had forecast. Speculation that growth would be stronger than expected had lifted U.S. stocks on Thursday

While the result marked a sharp slowdown from the fourth quarter, when growth hit 8.9%, "green shoots have sprung up in many sectors, convincing us that the current slowdown looks more and more like a slow consolidation, rather than a precipitous downturn." said Xianfang Ren, senior China analyst at IHS Global Insights.

Additionally, slowing growth may support expectations that the Chinese government will ease monetary policy.

"We believe that the government will react to this weaker-than-expected GDP growth rate by introducing more policy measures to boost lending, speed up project starts, encourage consumption, and support property sales," Jun Ma, Deutsche Bank greater China chief economist said. "The fact that the trough of sequential growth is likely behind us and that further policy easing is forthcoming in the second-quarter will provide a very positive environment for the equity market."

Hong Kong's Hang Seng Index climbed 1.8% to 20701.04 and Japan's Nikkei Stock Average added 1.2% to 9637.99, while Australia's S&P/ASX 200 index rose 1% to 4323.3 and South Korea's Kospi gained 1.1% to 2008.91.

China's Shanghai Composite edged up 0.4% to 2359.16 and Singapore's Straits Times Index gained 0.3% to 2987.82.

But the Bombay Stock Exchange's Sensitive Index fell 1.4% to 17094.51.

Markets showed relief when North Korea's rocket launch on Friday morning fizzled out, with the rocket breaking apart soon after liftoff. Also supporting sentiment were comments from the president of the New York Federal Reserve on Thursday that helped spur hopes of more stimulus and investors also welcomed lower borrowing costs in Europe and strong lending data from China.

In Hong Kong, financial and property sector firms rallied. Agricultural Bank of China jumped 6% and Ping An Insurance Group climbed 4.3%. China Overseas Land & Investment added 2.4% and China Resources Land rose 5.5%.

China Cosco Holdings slipped 0.2%, also in Hong Kong, after reports the shipping giant could seek up to 10 billion yuan ($1.59 billion) from the Ministry of Finance after record losses in 2011.

Resource firms in Australia gained, though they slipped from the day's highs after the weaker-than-expected growth figures from key customer China. Global miners BHP Billiton and Rio Tinto advanced 1.7% and 2.3% each, while copper producer PanAust gained 4.5%.

Lynas jumped 7.8% after the rare-earths miner won a court challenge to its effort to complete a processing plant in Malaysia.

In Tokyo, index heavyweight Fast Retailing leapt 8.6% after the fast-fashion company revised up its full-year earnings outlook as it reported six-month results late Thursday.

Sony tumbled 5.5% after the strategy unveiled by its new chief executive, included a three-year plan to increase revenue to ¥8.5 trillion (about $105 billion) failed to impress investors.

"I can't see any way Sony can possibly achieve that kind of number, especially since its business has been shrinking," said David Rubenstein, senior technology analyst at Religare Global Asset Management Japan.

In Mumbai, Infosys plunged 13% to its lowest level in more than six months, pulling down rivals Wipro and Tata Consultancy Services, after India's second-largest software exporter by sales said it expects this fiscal year revenue to grow 8% to 10%. That is short of the forecast of 11% to 14% growth for the sector from outsourcing industry body Nasscom.

—Miyuki Seguchi contributed to this article.

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