HONG KONG (AP) -- Chinese stocks fell Wednesday after a survey showed the country's manufacturing fell to its lowest point in nearly a year, though other Asian markets bounced back to finish higher after the report.
Japan's stock benchmark also sank after HSBC said its preliminary China purchasing managers index for July declined more than expected to an 11-month low, another sign of a deepening economic slowdown.
The widely watched private report is one of the earliest indicators for clues to the health of China's economy, the world's second biggest. Analysts say the preliminary report paves the way for more disappointment when the full version and an official PMI are released next month. But the disappointing report also raised hopes among investors of more measures from Beijing to stoke growth.
The Shanghai Composite Index in mainland China closed 0.5 percent lower at 2,033.33 after falling as much as 1.3 percent. Japan's Nikkei 225 dropped 0.3 percent to 14,731.28.
Other indexes reversed earlier losses to finish in positive territory. Hong Kong's Hang Seng gained 0.2 percent to 21,968.93 while mainland China's smaller Shenzhen Composite Index was 0.7 percent higher at 980.97.
South Korea's Kospi rose 0.4 percent to 1,912.08 and Australia's S&P ASX 200 advanced 0.4 percent to 5,035.10.
Stocks were higher In early European trading as investors awaited the release of purchasing manager indexes in France and Germany. France's CAC 40 was up 0.7 percent to 3,948.96 while Germany's DAX was 0.5 percent higher at 8,354.75. The FTSE 100 index of leading British companies was up 0.6 percent to 6,636.05.
U.S. stocks were poised to edge higher. Dow futures were up 0.2 percent to 15,538.00 while broader S&P 500 futures rose 0.2 percent to 1,691.70.
The HSBC PMI survey, which covers 420 businesses, found that output, new orders and employment all decreased at faster rates.
"Whenever we see bad economic data from China that's not good news," said Jackson Wong, vice president at Tanrich Securities. Wong added that
While the disappointing manufacturing report dragged down Asia stocks, it also raised investors' hopes that Beijing would consider new stimulus for China's economy following two straight quarters of declining growth. A day before, newspapers reported on comments by China's top economic official, Premier Li Keqiang, who promised that growth would not fall below 7 percent.
"We believe that such a negative scenario will not materialize and that China will announce new stimulus measures soon — modest and targeted ones but sufficient for growth to achieve this year's 7.5 percent goal," Credit Agricole CIB strategist Dariusz Kowalczyk said in a report. "The worse the PMI the bigger the measures would be."
Jian Chang, China economist at Barclays, said, "It is unsurprising that a further worsening of economic data would lead to greater expectations of policy stimulus and provide a boost to market sentiment, at least temporarily."
However, Wong was more skeptical that Beijing would take action.
"If we don't see any concrete evidence that anything will be rolled out in short time, the market is reluctant to speculate on that," he said. "They won't buy into this hype."
In the U.S., the Dow Jones industrial average rose 0.1 percent to close at 15,567.74. The broader Standard & Poor's 500 dropped 0.2 percent to 1,692.39 while the Nasdaq composite fell 0.6 percent, to 3,579.27.
In currency markets, the dollar rose to 100.02 Japanese yen from 99.41 yen late Tuesday. The euro strengthened to $1.3239 from $1.3226.
Benchmark crude for September delivery was up 1 cents to $107.25 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to settle at $107.23 on Monday.