12.08.201302:04:03UTC+00China stocks bolsters, Japan stocks slump

Japanese stocks dropped Monday, hit by a strengthening yen and slower-than-expected economic growth in the April-June quarter, but Chinese shares gained after data showing banks issued more credit than estimated in July.

Japan’s Nikkei Stock Average slip 0.7% after the government said the economy grew at an annualized rate of 2.6%. The expansion marked a third straight quarter of growth but fell a full percentage point short of the 3.6% development calculated in separate Dow Jones Newswires and Reuters surveys.

“The economic conditions have turned out less favorable or more tricky for the scheduled consumption-tax hikes,” said Crédit Agricole economist Kazuhiko Ogata.

Ogata cited uncertainty about the plan’s implementation following Japan’s Prime Minister Shinzo Abe earlier instructions to ministers to evaluate the impact from the planned consumption tax hikes before making a final decision on the increase.

Japan’s parliament has already approved a hike in the consumption tax to 8% by April 2014 and to 10% by October 2015, from 5% at present. The tax increase, aimed at boosting the revenue of the highly-indebted government in Tokyo, is expected to weigh on the nation’s economic recovery.

Financial shares pulled back in Tokyo, with Daiwa Securities Group Inc. giving up 4.4%, Nomura Holdings Inc. backsliding 4.1%, and Mitsubishi UFJ Financial Group Inc. dropped 0.8%.

Bridgestone Corp. soared 3.6% after the tire maker raised its profit forecast for the fiscal year ending next March, while Citizen Holdings Co. skyrocketed 16.2%, boosted by strong results and a boost in its profit outlook.

But many other exporters retreated after the U.S. dollar briefly run under the ¥96-level, with Fast Retailing Co. slumping 1.1%, and Nikon Corp. missing 3%.

Elsewhere in Asia, the Shanghai Composite spiked 0.9%, and Hong Kong’s Hang Seng Index traded 1.2% higher after a weak start.

Australia’s S&P/ASX 200 up with 0.4%, but South Korea’s Kospi downgraded 0.1% in a rough exchange.

Banks rose in Shanghai after data released following the stock market’s close Friday showed Chinese banks made 699.9 billion yuan ($114.3 billion) worth of local-currency loans in July, beating expectations.

Shares of China Minsheng Banking Corp. boosted 2%, and China Merchants Bank Co. rose 1.1%.

In Hong Kong, China Resources Land Ltd. uptrend 3.2%, refining giant China Petroleum & Chemical Corp. hiked 4.3%, and coal major China Shenhua Energy Co. flew 5.8% higher amid expectations for an improvement in the Chinese economy.

“With uncertainty over [U.S.] Federal Reserve stimulus measures lurking in the background, markets are struggling to find direction,” said Rivkin Securities global analyst Tim Radford. “Given it’s a relatively quiet economic week ahead, we could expect to see equities track sideways.”

Australian miners posted solid gains following an increase in metals prices Friday. BHP Billiton Ltd. exchanged 2.6% more, and Rio Tinto Ltd. leapt 3.3%.

Newcrest Mining Ltd. speared higher by 4.7% despite posting a record annual loss and scrapping its dividend payment, as its profit after stripping off one-time impairment charges came ahead of expectations.