By WEI-ZHE TAN
Signs of slower manufacturing growth in China weighed on shares in Hong Kong and Sydney Thursday.
China's April HSBC manufacturing Purchasing Managers' Index fell to 50.4 from 51.6 in March. The data follows a reading of 50.6 in the official PMI, a competing index released Wednesday, which was also down from the previous month.
"The slower growth of manufacturing activity in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up," said HSBC's chief economist for China, Qu Hongbin.
The Shanghai Composite Index was down 0.1%, while the Hang Seng Index slipped 0.3% after returning from a holiday on Wednesday.
Australia's S&P/ASX 200 was off 0.7% amid the signs of slowing growth in China. The country is a major exporter of raw materials to Asia's largest economy.
Resources stocks fell with BHP Billiton down 0.9% while Fortescue Metals Group lost 2.3%.
Persistent yen strength continued to weigh on Japan's stock market as news of the U.S. Federal Reserve's intent to carry on with its easing measures pulled the dollar lower.
The Federal Open Market Committee said in a statement Wednesday that it would continue with its bond-buying program as widely expected. The greenback was at ¥97.31 from ¥97.38 late Wednesday in New York.
"The Fed's comments show that the risk of weaker economic growth, accompanied by a 'disinflationary' effect is possible, denting the global economic recovery," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "The risk for more yen strengthening and a stock market correction remains real."
The Nikkei Stock Average was down 0.5% with some exporters hit by the stronger local currency. Toyota Motor was 1.4% lower, while Fujitsu fell 1.3%.
Daiwa Securities Group fell 1.8% despite reporting that net profit for the final quarter of the last fiscal year rose fourfold on-year on robust growth in its retail business on the back of the local stock market rally back then.
Sharp Corp. however climbed 4.7% on a Nikkei report that Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ are considering a roughly ¥100 billion credit facility for the LCD panel maker to help meet an upcoming convertible bond redemption.
South Korea's Kospi Composite was down 0.4%, with investors in Seoul finding comfort in defensive plays such as telecommunication stocks. KT Corp. was up 6.6% and SK Telecom added 5.4%.
The euro was trading in a narrow range as investors looked to the European Central Bank's policy meeting later in the global day for cues. The single currency was at ¥128.25 versus the yen from ¥128.40 and at $1.3175 against the greenback from $1.3182.
Write to Wei-Zhe Tan at wei-zhe.tan@dowjones.com
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