Asia stocks choppy amid tepid China recovery signs

Asian stock markets choppy after China reports improved but tepid economic data

Associated Press

BANGKOK (AP) -- Asian stock markets were choppy Friday after China reported better-than-expected but still tepid economic data.

Producer prices, or the price of goods as they leave factories, fell in July but at a slower rate than the month before — a sign that demand may be strengthening following a prolonged slump. Production prices fell 2.3 percent for the month compared to a year earlier, but that better than June's 2.7 percent drop.

Analysts said they were expecting to see modest improvements in industrial production and retail sales figures for July, also due out Friday.

"Firmer and higher than expected activity numbers, combined with stable and lower than anticipated price pressures, would be positive for sentiment" in China and other emerging markets, analysts at Credit Agricole CIB in Hong Kong said in a market commentary.

On Thursday, customs data showed Chinese exports and imports both increased in July, beating expectations and easing concerns over the slowdown that has dragged down growth in the world's second-biggest economy to a two-decade low.

Japan's Nikkei 225 index swung from gains to losses as the yen picked up strength against the dollar. The Tokyo benchmark was 0.1 percent lower at 13,595.94.

South Korea's Kospi advanced 0.2 percent to 1,887.65. Hong Kong's Hang Seng gained 0.3 percent to 21,726.44. Australia's S&P/ASX 200 fell 0.4 percent to 5,047.30, dragged down by losses in the banking sector despite gains in mining shares.

Mainland Chinese opened higher but fell into negative territory by midday. Markets in Singapore, Malaysia, Indonesia and the Philippines were closed for holidays.

Among individual stocks, Geely Automobile Holdings in Hong Kong jumped 4.1 percent while Greatwall Motor advanced 3 percent. Linus Yip, strategist at First Shanghai Securities in Hong Kong, said consumer and auto shares were advancing on the back of improving sentiment, due to the perception of a modest improvement on the Chinese mainland.

"The economy in mainland China is coming back gradually so the market focus returns to consumer stocks. I think it's reasonable," Yip said.

On Wall Street on Thursday, the Dow Jones industrial average rose 0.2 percent to close at 15,498.32. The S&P 500 rose 0.4 percent to 1,697.48. The Nasdaq composite index rose 0.4 percent to 3,669.12.

The top concern among stock traders has been the U.S. Federal Reserve and when it might rein in its monetary stimulus. Over the past few years, the Fed has helped keep interest rates super-low in order to spur growth. The program has also been a boon to stock markets, where investors plowed their money in search of returns that bested bonds.

Benchmark oil for September delivery was up 79 cents to $104.19 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 97 cents to close at $103.40 on the Nymex on Thursday.

In currencies, the euro rose to $1.3381 from $1.3377 late Thursday. The dollar fell to 96.51 yen from 96.82 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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