Asia stocks drop on weak Chinese manufacturing data; Nikkei down 0.89%

Investing.com - Asian stocks fell on Wednesday after China released weaker-than-expected manufacturing data.

During Asian trading on Wendesday, Hong Kong's Hang Seng Index was up 0.26%, Australia's S&P/ASX200 was down 0.21%, while Japan’s Nikkei 225 Index was down 0.89%.

The China Logistics Information Center reported Wednesday that its Chinese Manufacturing PMI rose to an annual rate of 50.10 in July, from 50.20 in June.

Analysts had expected the figure to rise to 50.30 last month.

The numbers show that while Chinese factory output may be expanding, orders from the country's manufacturing base slowed last month.

Meanwhile, investors took an about-face from earlier sentiments that the Federal Reserve will announce some sort of plan to stimulate its economy.

The Fed will unveil its latest monetary policy decision later Wednesday, and many investors had been expecting the Fed to announce or at least hint at plans to jolt the economy with a fresh round of quantitative easing, which are asset purchases from banks that pump liquidity into the economy to encourage investing and hiring.

The Fed will meet again in September, and talk began to build in Asian trading Wednesday that the U.S. central bank will wait until then before deciding if the economy is in greater need of a monetary kick-start.

Quantitative easing sends stock prices rising.

Meanwhile in Europe, ECB President Mario Draghi has he would do whatever is necessary to defend the eurozone, though some feel Europe's monetary authority will stop short of outright bond purchases from banks via quantitative easing, a tool used twice by the Federal Reserve.

The ECB has purchased sovereign debt in the past but withdrew money from circulation to buy those assets, whereas quantitative easing prints money out of thin air to boost the economy.

Fading hopes for a more aggressive policy stance out of Europe sent stocks falling as well.
In the U.S., data released earlier revealed an economy that continues to limp along its road to recovery.

The Chicago purchasing managers’ index rose to 53.7 in July from 52.9 in June, beating out expectations for a decline to 52.4.

In addition, the Conference Board said that its index of U.S. consumer confidence rose to 65.9 in July, from 62.7 in the preceding month, beating expectations for a 61.5 reading.

Nevertheless, U.S. personal spending rose 0.2% in June in line with expectations but unchanged from May, while personal income rose 0.5%, slightly beating out expectations for a 0.4% increase.

In Hong Kong, top decliners included Li & Fung, down 1.70%, CNOOC, down 1.59%, and CHALCO, down 0.94%.

In Australia, top decliners included Aquarius Platinum, down 5.00%, Energy Resources of Australia, down 3.60%, and art Energy, down 3.33%.

European stock futures indicated a mixed opening.

France's CAC 40 futures pointed to a loss of 0.05%, while Germany's DAX 30 futures signaled a gain of 0.12%. Meanwhile, in the U.K., the FTSE 100 futures indicated a loss of 0.04%.

Dow Jones Industrial Average futures were down 0.08% while the S&P 500 futures were down 0.21%.

All eyes throughout the day will focus on the Federal Reserve in anticipation of its statement on monetary policy.