World Business
China data may signal slowdown
By Kana Nishizawa, Akiko Ikeda and Ronnie Koo in Hong Kong (China Daily)
Updated: 2010-07-19 10:10
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TOKYO - Asian stocks rose for a second week as record sales at Intel Corp and unprecedented economic growth in Singapore overshadowed weak US factory reports and a slowdown in China.
LG Corp, the largest shareholder in the world's third-biggest maker of mobile phones, surged 12 percent to 73,700 won as Intel's second quarter sales beat estimates. DBS Group advanced 3.9 percent in Singapore after the city-state announced its economy expanded at a record 18.1 percent pace in the first half of 2010. Li & Fung Ltd, the biggest supplier to retailers including Wal-Mart Stores Inc and Target Corp, dropped 3.4 percent in Hong Kong as Federal Reserve officials downgraded their outlook for the US economy and retail sales slowed.
The MSCI Asia Pacific Index climbed 0.05 point, or less than 0.1 percent, last week to 116.23, its smallest weekly advance since October 2005. A late surge by Indian shares pulled the index into positive territory after declining US factory output and weaker-than-expected earnings at Google Inc had seen the Asian gauge erase gains from earlier in the week.
"Expectations for the economic recovery were strong but the momentum is weakening," said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co, which oversees $73 billion in assets. "It seems spending by both companies and households has leveled off. We can't be very optimistic about the economic prospects yet."
Japan's Nikkei 225 Stock Average declined 1.9 percent last week, led by banks after the ruling party lost control of the upper house in elections. China's Shanghai Composite Index lost 1.9 percent as China's expansion slowed. Hong Kong's Hang Seng Index declined 0.6 percent. Australia's S&P/ASX 200 Index rose 0.6 percent. South Korea's Kospi Index rose 0.9 percent. Singapore's Straits Times Index climbed 1.4 percent after its economy grew at a record pace.
Intel had record second-quarter revenues and predicts third-quarter sales will be $11.6 billion, plus or minus $400 million, the company based in Santa Clara, California, said over the weekend in a statement. Analysts had estimated $10.9 billion on average, according to a Bloomberg survey.
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Singapore's gross domestic product expanded at a 26 percent annualized pace in the second quarter from the previous three months, after a revised 45.9 percent gain in January to March, the trade ministry said on July 14. Growth in the first half was the fastest since records began in 1975, prompting the government to predict gross domestic product will rise 13 percent to 15 percent in 2010.
In Hong Kong, Li & Fung Ltd dropped 3.4 percent to HK$36.50. Esprit Holdings Ltd, a global fashion retailer, declined 1.7 percent to HK$43.45. Stocks also fell after China's economic expansion eased to 10.3 percent in the second quarter from an 11.9 percent gain the previous quarter.
In the US, factory output fell the most in a year last month, according to a Federal Reserve report. Sales at US retailers dropped 0.5 percent in June, more than projected, Commerce Department figures showed on July 14.
Bloomberg