05.08.201307:03:01UTC+00Japan stocks slide; Hong Kong bolsters on China data

Japanese stocks pulled back Monday as several financial and technology companies retreat from strong recent advances, but Hong Kong shares edged higher after data showing an improvement in China’s services-sector activity.

The Nikkei Stock Average missed 1.4% in Tokyo, after rallying in the previous two sessions, while Australia’s S&P/ASX 200 sank 0.2% and South Korea’s Kospi eased 0.1%.

The losses came even as stocks on Wall Street shrugged off a weaker-than-expected U.S. non-farm payrolls data for July, lifting the Dow Jones Industrial Average and the Standard & Poor’s 500 Index to fresh record highs on Friday.

“The weakness in the [U.S.] employment report ... included a decline in hourly earnings (which may have knock-on effects on income and consumption) and a shorter work week, which depresses output more than the increased number of workers would boost it,” said Brown Brothers Harriman head of currency strategy Marc Chandler.

In China, Hong Kong’s Hang Seng Index bolstered 0.2%, though the Shanghai Composite Index declined 0.2% in choppy trade.

Data released Monday by HSBC put its China’s Services Business Activity Index for July at 51.3, staying above the 50-point threshold that indicates an improvement in activity, and unmoved from the level seen in the June survey.

The figure followed a government-sponsored version of the service-sector survey over the weekend, which showed the July non-manufacturing index accelerated to 54.1 from 53.9 in June.

“This is another sign that the services sector is stabilizing, and more importantly, is coping with the clampdown on government spending,” said Kim Eng Securities director of sales trading Andrew Sullivan.

In Hong Kong trading, shares of China Resources Land Ltd. upgraded 2.5%, Internet major Tencent Holdings Ltd. boosted 1.3%, and Bank of China Ltd. acquired 0.9% in Hong Kong after the Chinese services-sector data.

Among the notable backsliders in Tokyo, Advantest Corp. downgraded 1.3%, NTT Data Corp. drifted 1.6% back, insurer T&D Holdings Inc. relinquished 4.3%, and banking major Mitsubishi UFJ Financial Group Inc. exchanged 2% lesser.

The losses outweighed the positive effect from a string of upbeat results for Japanese companies. The Nikkei business daily reported that consolidated pretax profits for the 668 listed companies that have already announced earnings rose an average 42% in the April-to-June quarter compared to the year-earlier period.

Shares of Toyota Motor Corp. fell 0.6%, even as the auto giant posted better-than-expected earnings and lifted its annual profit outlook.

Financials declined in Sydney after strong recent gains, with Macquarie Group Ltd. missing 0.3%, and Australia & New Zealand Banking Group surrendering 0.6%.

The losses came after the S&P/ASX 200 went for 10 straight trading days without a loss, including a 1.1% gain on Friday, amid expectations that the Reserve Bank of Australia may cut its policy interest rate on Tuesday.

Paladin Energy Ltd. plunged 28%, after the uranium miner raised funds through a private placement of shares.

Also lower, shares of Virgin Australia Holdings Ltd. declined 3.3% after the carrier warned of a yearly loss of up to 110 million Australian dollars ($97.8 million).