ASIA MARKETS: Asia Markets Look To China Data For Direction

By Michael Kitchen, MarketWatch

LOS ANGELES (MarketWatch) -- Stocks fell across Asia last Wednesday after HSBC released a set of downbeat Chinese manufacturing figures, making China data due out in the coming week all the more crucial.

The recent HSBC data -- a preliminary edition of its manufacturing Purchasing Managers Index -- showed a surprise contraction for the sector, with the index's headline number falling from the previous month's 51.0 down to 48.0, the lowest level since early 2009.

The final version of the HSBC China PMI is due out Thursday, along with a separate government-sponsored PMI that tends to focus more on larger manufacturers.

Markets will be watching the results of each closely for confirmation of a slowdown in the world's second-largest economy.

China will not be the only show on the data stage this week, with key Japanese industrial production statistics for October expected on Wednesday.

Japan's September output disappointed analysts, marking a 4% month-on-month drop after rising 0.8% the previous month.

The October result may offer little in the way of improvement, as catastrophic flooding in Thailand has hit not just Japanese firms with plants there, but also those which depend on Thai-made parts.

Later Wednesday, India is due to release its fiscal second-quarter gross domestic product result.

While economists don't expect the Indian economy to show contraction, markets will watch to see whether a recent downtrend continues from the April-June quarter's 7.7% increase, which was the weakest growth in six quarters.

On Thursday, Australia is scheduled to announce retail sales for October, and here too there are ominous signs.

Although, Australian retailers marked a third straight rise in sales during September, major department-store operator David Jones Ltd. said this past week that its August-October sales fell by just over 11%.

And more broadly, retail sales growth in Australia has been slowing, as July's 0.8% seasonally adjusted rise gave way to August's 0.6% gain, followed by September's 0.4% increase.