Asian Equities Erase Gains after China PMI

An index of Asian shares erased its early gains on Tuesday after a measure of Chinese factory activity unexpectedly skidded to an 11-month low.  The flash HSBC/Markit Purchasing Managers’ Index (PMI) dipped to 49.2 in March, below the 50-point level. Economists polled by Reuters had forecast a reading of 50.6, slightly weaker than February’s final PMI of 50.7.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down about 0.1 percent.  The private survey signaled persistent weakness in the world’s second-largest economy that is likely to add to calls for more policy easing from Beijing.

“A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers,” Annabel Fiddes, an economist at Markit said.  The Shanghai Composite Index .SSEC, which has recently pushed to seven-year highs, sagged 0.3 percent in early trading. Japan’s Nikkei stock average .N225 slipped about 0.5 percent, pulling away from the previous session’s 15-year highs.

Reuters