Reuters: Hot Stocks: Australia shares slip 0.5 pct, weak metals prices, soft China PMI weigh

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Australia shares slip 0.5 pct, weak metals prices, soft China PMI weigh May 1st 2013, 02:03 Tue Apr 30, 2013 10:03pm EDT (Adds details, comments, stocks on the move) SYDNEY, May 1 (Reuters) - Australian shares slipped 0.5 percent in late morning trade on Wednesday, as disappointing Chinese manufacturing data and weak metal prices offset a positive lead from Wall Street and weighed on miners. Growth in China's manufacturing sector unexpectedly slowed in April, with the official purchasing managers' index (PMI) falling to 50.6 from March's 11-month high of 50.9, data showed on Wednesday. This followed the HSBC flash PMI figures last week, which had already missed market expectations, pointing to below-target growth in the world's second largest economy and Australia's biggest export market. "It looks like China is in a situation where sluggish growth is going to continue for longer, which is not great from a commodities point-of-view," said Damien Boey, an equity strategist at Credit Suisse in Sydney. The benchmark S&P/ASX 200 index dropped 26.9 points to 5,164.3 by 0139 GMT. The market climbed 1.3 percent on Tuesday to close at its highest level in almost five years, led by sharp gains in the financial sector. Global miner BHP Billiton dropped 1.7 percent, while rival Rio Tinto Ltd lost 1.8 percent, deepening their losses after the release of Chinese PMI figures. London copper retreated on Wednesday after logging its deepest monthly fall in almost a year in April, as the weaker PMI data from China fueled demand concerns. Martin Lakos, a division director at Macquarie Bank in Sydney, believes that investors might be getting too caught up on monthly figures from China and neglecting broad economic trends. "We are still comfortable with the trend," he said. "The growth at 7.5 percent (in China) has been managed very well. The new reform government is going to continue to support growth, more likely through infrastructure spend." Australia's big four banks also pulled back, as investors opted to take profit after the rally in the previous session following Australia and New Zealand Banking Group's upbeat earnings. ANZ dropped 0.3 percent, while the biggest lender Commonwealth Bank of Australia lost 0.8 percent. "On most metrics, banks are looking very expensive now. Quite hard to justify the valuation, there's a limit to how much good news the banks will keep responding to," Credit Suisse's Boey said. New Zealand's benchmark NZX 50 index pared earlier losses and added 1.7 points to 4,615.9. STOCKS ON THE MOVE * The energy sector also suffered a broad sell-off on tumbling oil prices. Australia's biggest oil and gas producer Woodside Petroleum Ltd fell 1.1 percent to A$37.17. (0130 GMT) (Reporting By Maggie Lu Yueyang and Michael Sin; Editing by Shri Navaratnam) Link this Share this Digg this Email Reprints

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