Asia stocks mixed on global growth worries, China easing hopes

Investing.com - Asian stock markets were mixed on Tuesday, amid ongoing concerns over the health of the global economy and after China’s central bank injected a large dose of liquidity into money markets.

Markets in Hong Kong and mainland China rallied on the news, while shares in Japan declined as trading resumed after Monday’s holiday.

During late Asian trade, Hong Kong's Hang Seng Index jumped 1.1%, Australia’s ASX/200 Index ended up 0.5%, while Japan’s Nikkei 225 Index sank 1.1%.

Market sentiment improved following a report that the People’s Bank of China injected CNY265 billion into the money market, in a bid to ease tight liquidity conditions. It was the second largest daily reverse repo used by the central bank so far.

Optimism for further policy moves out of Beijing strengthened after PBOC Governor Zhou Xiaochuan said monetary policy must remain flexible in order to help counter the weak external environment.  

In Hong Kong, the Hang Seng rallied, tracking sharp gains in mainland China, where markets jumped 2%.

China’s biggest lender Industrial and Commercial Bank of China saw shares climb 2.2%, China Construction Bank shares gained 1.5%, while Ping An shares rose 1.3%.

Raw material producers were higher after commodity prices rebounded from the previous day’s sell-off, sparked by concerns over weakening global growth. PetroChina shares climbed 2.7%, CNOOC added 1.5%, and Zijin Mining Group rose 1%.

Elsewhere, shares in Australia ended at a fresh 14-month high, with gains in miners supporting the market.

Iron ore producer Fortescue Metals Group saw shares surge 6.5%, tracking sharp gains in the commodity, while Rio Tinto and BHP Billiton added 1.45% and 0.65% respectively.

Meanwhile, in Tokyo, the Nikkei sank as investors remained concerned over the outlook for global growth and its impact on company earnings.

The World Bank said it had cut its 2012 growth forecast for developing Asia-Pacific economies to 7.2% from a May forecast of 7.6%. The World Bank also said China's economy will growth 7.7% this year, down from a May forecast of 8.2%.

The International Monetary Fund, meanwhile, cut its 2012 global growth forecast to 3.3% from a July estimate of 3.5%.

Shares in troubled electronics maker Sharp plunged 14.7% after a weekend Nikkei report that potential investor Hon Hai Precision Industry wants the firm to split its liquid-crystal-display operations.

In Europe, regional markets were lower after the open, as uncertainty over how soon Spain will formally request a bailout curbed demand for riskier assets.

The EURO STOXX 50 fell 0.35%, France’s CAC 40 shed 0.25%, London’s FTSE 100 eased down 0.2%, while Germany's DAX slumped 0.5%.

Later in the day, German Chancellor Angela Merkel was to travel to Athens for talks with Greek political leaders. Meanwhile, finance ministers from the European Union were to hold a day of talks in Brussels.

Also Tuesday, ECB President Mario Draghi was to testify to the European Parliament, while the International Monetary Fund and world bank leaders were to continue talks in Tokyo.