Asian stocks tumble on soft PMI data

Stocks in Asia generally fell today (November 20th), with soft purchasing managers' index (PMI) data out of China dampening investor sentiment in the region.

The HSBC report showed that manufacturing growth in the world's second-largest economy stayed flat in November, with the headline PMI figure standing at 50.

A PMI above 50 denotes economic growth, whereas a lower number indicates contraction. The latest reading represents China's lowest manufacturing PMI in six months, in contrast to October's three-month high of 50.4.

"Disinflationary pressures remain strong and the labour market showed further signs of weakening," commented Hongbin Qu, chief China economist at HSBC.

In equities trading, MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.5 per cent. As of 06:25 GMT, the Shanghai Composite Index had lost 0.1 per cent, while South Korea's Kospi registered a decline of 0.5 per cent, Reuters reports.

Over in Australia, the S&P/ASX 200 fell one per cent, cancelling out this year's gains on the back of a string of weak data releases from China and a decline in the prices of iron ore, one of the country's key exports.

The Nikkei 225 bucked the trend, however, as it continued to rally on the back of a favourable USD/JPY exchange rate. The yen fell to fresh seven-year lows against the dollar today, heightening investor interest in Japanese importers.

After rising 0.3 per cent earlier in the session, the benchmark index pared its gains on profit-taking to close up 0.1 per cent at the end of trading.

The yen has been pushed lower for several weeks now, initially responding to the Bank of Japan's surprise stimulus expansion - announced at the end of October - and later to prime minister Shinzo Abe's confirmation this week that a planned sales tax hike will be postponed.

Japan technically slipped into a recession in the third quarter, with its economy - the second-largest in Asia - contracting 1.6 per cent against expectations for 2.1 per cent growth.