Hong Kong IPOs fail to impress Asian markets still sluggish

Asian stocks traded lower as recent Hong Kong IPOs failed to impress on their debut, leaving investors disappointed.

The Hong Kong Stock Exchange is a key barometer for Asia Pacific sentiment and the recent stream of new businesses having listed shows just how uneasy equities investors are with the current market situation.

Both Chow Tai Fook Jewellery and New China Life fell by at least 6% on their first day of listing on the exchange. These are significant businesses. Chow Tai Fook for example generates more revenue than Tiffany & Co. New China Life is a significant Chinese insurance business, the third largest life insurer specifically.

More broadly, the MSCI Asia Pacific index was 1.5% lower in early afternoon Tokyo trading. The Australian S&P/ASX200 index finished the session 1.2% lower, weighed down by the large miners including BHP Billiton and Rio Tinto as commodity prices continue to weaken.

Gold managed to claw back some of its recent losses but was last still trading at US$1571/oz with more downside likely overnight. The large falls over the past week have caused many traders to re-evaluate their assumptions on the U.S. dollar and if in fact a US dollar resurgence has arrived earlier than expected.

In regional economic news, China’s manufacturing index was measured by HSCI managed to print at 49 when compared to Novembers 47.7 reading. The measure suggests there was an improvement but even a print at 49 suggests quite sluggish output activity, particularly when compared to the beginning of 2011. The dividing line between contraction and expansion is 50.