The MSCI Asia Pacific excluding Japan Index advanced 0.3 percent to 450.42 as of 9:31 a.m. in Hong Kong, paring this week?s slide to 0.8 percent. Hong Kong?s Hang Seng Index (HSI) added 0.4 percent, South Korea?s Kospi index climbed 0.7 percent and Australia?s S& P/ASX 200 Index rose 0.4 percent. Japanese markets are closed for a holiday. New Zealand?s NZX 50 Index slid 0.2 percent.
Asian shares outside Japan fell 1.7 percent yesterday, taking the gauge?s loss this year to 4.1 percent as data from exports to industrial output showed signs of a slowdown in China and Federal Reserve Chair Janet Yellen indicated U.S. interest rates could rise as soon as six months after the end of the central bank?s bond-buying program. HSBC Holdings Plc and Markit Economics? gauge of Chinese manufacturing is due March 24.
?The markets have a lot to digest with an unofficial U.S. rate rise potentially mid next year,? Tim Schroeders, a Melbourne-based money manager who helps oversee $1 billion in equities at Pengana Capital Ltd., said by phone. ?You don?t want to stick your neck out too far. We?re not overly cautious, but respectful that the dynamics are changing. The focus is going to come back to China on Monday.?
Bear Market
Hong Kong?s Hang Seng China Enterprises Index (HSCEI) of mainland stocks traded in the city dropped 1.7 percent yesterday, bringing losses from its Dec. 2 high past the 20 percent threshold that some investors consider a bear market. Losses came as the yuan sank to a one-year low amid deepening concern the world?s second-largest economy is slowing. The CSI 300 Index of China?s 300 largest firms fell to a five-year low yesterday as Goldman Sachs Group Inc. cut its growth outlook for China.
The HSBC/Markit China manufacturing purchasing managers? index will come in at 48.7 for this month from 48.5 in February, according to analysts surveyed by Bloomberg. Readings below 50 signal a contraction.
Yellen this week said the quantitative-easing program used to stimulate the U.S. economy would end this fall should the central bank continue to taper in measured steps. There will be ?considerable time? between the end of the stimulus and the first rate increase, meaning ?six months or that type of thing,? she said.
U.S. Futures
Futures on the Standard & Poor?s 500 Index slipped 0.1 percent today. The U.S. equities gauge yesterday gained 0.6 percent, rebounding from its first decline in three days following Yellen?s comments.
Quarterly Fed forecasts showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1 percent by the end of 2015 and 2.25 percent a year later. Money market rates showed traders see a 62 percent chance of an rate increase by June 2015, up from 57 percent two days ago.
The Conference Board?s gauge of the U.S. economic outlook for the next three to six months climbed 0.5 percent in February, the biggest gain since November, data yesterday showed.
The MSCI Asia Pacific excluding Japan Index traded yesterday at 11.8 times estimated profit, compared with 15.9 on the S& P 500 and 14.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
