China data, Greece uncertainty weigh Asia stocks

HONG KONG (MarketWatch) � Japanese and Australian shares fell while Hong Kong stocks ended flat after a choppy trading session Thursday, as an unexpected increase in Chinese inflation rate and uncertainty over Greek debt negotiations kept investor sentiment subdued.

Japan�s Nikkei Stock Average JP:100000018 �fell 0.2% to 9,002.24, Australia�s S&P/ASX 200 index AU:XJO �finished 0.2% lower at 4,282.90 and Hong Kong�s Hang Seng Index HK:HSI ended little changed at 21,010.01.

Elsewhere in Asia, South Korea�s Kospi KR:SEU �rose 0.5% to 2,014.62 and Taiwan�s Taiex XX:Y9999 �gained 0.5% to 7,910.78.

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Stocks drift a smidgeon higher, as investors await an agreement among Greek politicians on reforms ahead of the country's second international bailout.

Jamie Spiteri, head of trading at Shaw Stockbroking in Sydney, said �elements� such as developments in Europe and the Greece debt talks, as well as Chinese macroeconomic data, still hold influence over the markets.

�I think markets have still got the capacity to move [up] but I don�t think it�ll happen in a spectacular or consistent way,� he said.

Investor sentiment was also held in check by prolonged talks between the Greek government and other party leaders in the nation for an agreement on austerity measures, required to receive a next tranche of aid.

Meanwhile, the Shanghai Composite Index CN:000001 added 0.1% to 2,349.59 as investors considered the implications of the Chinese consumer price index (CPI) data. The release showed the nation�s consumer price index rose 4.5% in January from a year earlier, a pace well above economists� median forecast for a 4.1% rise, as food prices jumped on seasonal demand during the Chinese New Year holiday. See report on China inflation.

�Going forward, we expect headline CPI to ease further, providing ample room for Beijing to take more policy easing steps to support growth. That said, the current high level of CPI is likely to constrain the pace of further easing in the near term,� HSBC economists led by Qu Hongbin wrote in a report.

Several mainland banks dropped in Hong Kong after Chinese inflation data marked a setback to expectations Beijing may loosen its monetary policy in the near term.

Bank of Communications Co. HK:3328 BKFCF CN:601328 fell 2.5%, Agricultural Bank of China Ltd. HK:1288 �dropped 0.8% and Industrial & Commercial Bank of China Ltd. IDCBY HK:1398 �gave up 0.9%. In Shanghai, BoCom CN:601328 fell 1% and AgBank CN:601288 �dropped 0.7%, while Bank of Nanjing Co. CN:601009 �declined 1%.

Lending support to the markets, many Chinese property developers continued to rise after the People�s Bank of China recently pledged support to first-time home buyers.

China Resources Land Ltd. HK:1109 �CRBJY �jumped 5.7% and Evergrande Real Estate Group Ltd. HK:3333 EGRNF �soared 7.4% in Hong Kong; on mainland bourses, Poly Real Estate Group Co. CN:600048 �added 1.3% in Shanghai, while China Vanke Co. CN:200002 �CVKEY �gained 1.5% in Shenzhen.

Lenovo Group Ltd. LNVGY �HK:992 �climbed 3.8% in Hong Kong after reporting a 54% growth in quarter net profit.

Mining and metals stocks extended early losses in Australia after the data. BHP Billiton Ltd. AU:BHP �BHP �lost 1.6% and Fortescue Metals Group Ltd. AU:FMG fell 0.7%.

Japanese industrial firms were among the weaker performers in Tokyo on Thursday after December core machinery orders � seen as a leading indicator of capital spending � fell a larger-than-expected 7.1% from the year-ago period. See report on Japanese machinery order data.

Hitachi Construction Machinery Co. JP:6305 HTCMF retreated 1.4%, and Komatsu Ltd. JP:6301 KMTUF dropped 0.7%.

News Corp. AU:NWS NWSA �gained 0.9% in Sydney after reporting its fiscal second-quarter profit rose 65% on increased earnings at cable-television networks and film and television studios. Read more on News Corp. earnings

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