Asia stocks mostly lower after China data

SYDNEY (MarketWatch) � Asian markets traded mostly higher in a choppy session Friday, the first day of the new month, with stocks in Sydney and Shanghai notably higher, while Hong Kong shares came under some pressure.

Japan�s Nikkei Stock Average JP:100000018 �rose 0.5%, while Australia�s S&P/ASX 200 index AU:XJO �advanced 0.9% and the Shanghai Composite Index CN:000001 �rose 0.5%.

Singapore�s Straits Times Index SG:STI �and Taiwan�s Taiex XX:Y9999 edged up 0.1%, South Korea�s Kospi KR:SEU lost 0.2% and Hong Kong�s Hang Seng Index HK:HSI declined 0.3%.

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Data released Friday showed China�s official manufacturing Purchasing Managers� Index slipped to 50.4 in January from December�s 50.6, though it remained above the 50 level separating expansion from contraction. In contrast, the PMI based on a rival survey from HSBC climbed to 52.3 from 51.5 in December. Read: China�s manufacturing improves, surveys show

Analysts also differed in their interpretation of the numbers.

�The key is that it is still above 50, so there is still growth, but signs of a slight faltering. Considering the U.S. fiscal situation and the general slowdown in Europe, I think the number is still encouraging,� Kim Eng Securities head of sales trading Andrew Sullivan said of the government PMI.

However, IHS Global Insight economists were a bit gloomier.

�Whilst the [government�s] PMI remained above 50 in January, it pulled back from December�s reading, highlighting the fragility of the recovery. Indeed, the economy has yet to generate the type of self-perpetuating growth that is needed to put the recovery on a comfortable footing,� the IHS analysts said.

Commodity-related firms lost ground in mainland trading, with Chalco down 1.2% and Angang Steel Ltd. CN:000898 ANGGY down 1.3%.

Offsetting those losses on the mainland bourses, banks advanced after a local media report said lending at China�s four biggest state-owned banks picked up in January, with banks extending a combined 395 billion yuan ($62.9 billion) of new yuan loans between Jan. 1 and Jan. 27. Read: China Big 4 banks' new loans up from year earlier

Bank of Communications Co. CN:601328 �BCMXY , rose 2.2% and China Merchants Bank Co. CN:600036 CIHKY gained 2.1%.

Stocks in Hong Kong were weighed by the weak official manufacturing data from China, and a weak lead from the U.S. markets, which ended with small losses Thursday, even as they notched their best January in years. Investors were also bracing for Friday�s January nonfarm payrolls data, seen as one of the U.S. economy�s most important indicators. Read: U.S. stock market�s fall trims January gains.

Shares of Aluminum Corp. of China Ltd. HK:2600 � ACH , or Chalco, dropped 1.6%, Citic Pacific Ltd. HK:267 CTP �declined 2.4%, and China Petroleum & Chemical Corp. HK:386 �SNP �retreated 1.3%.

/quotes/zigman/4868099/sampled USDJPY 92.1300, +0.4124, +0.4497% /quotes/zigman/5986735 100000018 11,191.34, +52.68, +0.47% Dollar-yen Vs. Nikkei Average Year-to-date price moves

�It will be a heavy day in terms of economic data today. In particular, the U.S. jobs report and ISM Manufacturing Index will be in focus, and sentiment will largely hinge on those data release,� Cr�dit Agricole strategists said. Read: U.S. job growth in January: more of same.

The gains in Tokyo came as the dollar USDJPY �climbed to �92.17, its best level against the yen since June 2010, rising from late Thursday�s �91.46. Read: Dollar slips vs euro as Fed plan sinks in.

The yen�s losses came as Japanese economic data out Friday printed below expectations, with the unemployment rate rising back to 4.2% in December, while household spending fell despite forecasts for a flat reading. Read: Japan jobless, household spending data disappoint.

Earnings also helped support the Tokyo market, as Softbank Corp. JP:9984 �SFTBF rose 5.7% on the back of posting an October-December profit double that of a year ago. Strong results also sent NEC Corp. JP:6701 [NIPNF �jumping 8.5%.

Sharp Corp. JP:6753 �SHCAF �moved 5.8% higher after a Nikkei news report that strong smartphone earnings allowed the company to swing back to an operating profit in the October-December quarter. Sharp was due to report results after the market close.

On the downside, shares of Nomura Holdings Inc. JP:8604 NMR �dropped 2.7%. While the securities broker late Thursday posted a more-than-sevenfold rise in October-December profit compared to the previous quarter, its shares have already risen more than 80% since mid-November. Read: Nomura Holdings quarterly profit leaps.

Also losing ground, TDK Corp. JP:6762 �TTDKF �fell 6.8%, and Kyocera Corp. JP:6971 � KYO �dropped 1.8%, after both firms downgraded fiscal-year profit guidance.

Auto maker Honda Motor Co. JP:7267 �HMC �also cut its fiscal-year profit forecast. The firm�s shares were choppy, however, shaking off early losses to move up 0.3%, as the firm also reported a 62% gain in quarterly profit and is markedly sensitive to currency movements. Read: Honda earnings rise, but forecast trimmed.

In Australia, the benchmark S&P 200 started the new month on an upbeat note, with Mesoblast Ltd. AU:MSB �MBLTY �up 4.5%, and RedMed Inc. AU:RMD � RSMDF �higher by 2.9% in the health-care sector.

South Korean shares were weighed by losses for heavy-machinery firms, with Samsung Heavy Industries Co. KR:010140 �down 1.6% and Hyundai Heavy Industries Co. KR:009540 �lower by 0.2%.