ASIA MARKETS: Hong Kong, Japan Stocks Up After China Data

By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Hong Kong stocks climbed Friday after Chinese data showing consumer prices rose at a slower-than-expected rate in July, while Japanese shares climbed as a rebound on Wall Street helped lift several beaten-down issues after heavy recent losses.

Hong Kong's Hang Seng Index rose 0.3%, and Australia's S&P/ASX 200 pared early losses but was still down 0.4%. The Shanghai Composite was flat in choppy trading.

Official data released Friday showed July consumer prices in China rose 2.7%, matching the rate in June but slightly weaker than expectations. Producer prices dropped 2.3%, after witnessing a 2.7% slide in June.

"It seems that the government's campaign to deflate a potential housing bubble is having an effect. House-price growth is cooling, and this is reducing demand for furniture, electronics and other household goods," said Moody's Analytics economist Alaistair Chan.

"We expect inflation to remain under the government's 3.5% target for 2013. Aggregate demand in China is still below trend, due to a lack of policy accommodation," Chan said.

Meanwhile, Japan's Nikkei Stock Average rose 0.6%, paring its loss for the week to about 5.4%, while South Korea's Kospi inched up 0.2%.

Later on Friday, China was set to report more monthly economic data, including the July industrial production and retail sales figures.

"We feel even just consensus readings on China data will be enough to satisfy investors and promote the recovery," said IG Markets strategist Stan Shamu. He said that better-than-expected Chinese trade figures for July, released Thursday, had helped improve sentiment in global markets.

U.S. stocks rebounded Thursday to snap a three-day losing streak after the Chinese trade data, with the action also driven by further consideration of the Federal Reserve's outlook for its monthly bond purchases.

Major movers

Energy-sector shares gained in Hong Kong, with China Coal Energy Co. (CCOZY) rising 2.6%, while Kunlun Energy Co. (CNPXF) added 2.2%, also helped by Citigroup's upgrade of the stock's rating to buy.

In Shanghai, losses for property and financial stocks weighed on the market. Shares in Poly Real Estate Group Co. dropped 1.2%, and those in Haitong Securities Co. gave up 0.9%.

In Tokyo on Friday, shares of Mitsubishi Material Corp. (MIMTF) climbed 7.5%, Softbank Corp. (9984.TO) gained 1.8%, and Trend Micro Inc. (TMICY) added 1.4%.

 
   On the downside, Nikon Corp.   (NINOY) plunged 15% after its weak fiscal first-quarter results. 
 

In Sydney, diversified miner BHP Billiton Ltd. (BHP) gained 2%, and rival Rio Tinto Ltd. (RIO) added 1.7%, while gold company Newcrest Mining Ltd. (NCMGF) leapt 3.4%.

But losses in the financial and retail sectors weighed on the market, with Commonwealth Bank of Australia (CBAUY) losing 0.5%, and Wesfarmers Ltd. (WFAFY) shedding 1%.

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