China growth concerns worry Asian markets

Asian shares got the week off to a softer start as investors became cautious about the liquidity-driven rally while digesting comments about new growth targets in China.

Wen Jiabao, China’s premier, said that the country aimed to post an economic growth of 7.5 per cent this year, after eight consecutive years of keeping the symbolic target at 8 per cent.

Meanwhile, China’s services sector grew at its fastest pace in four months in February, though well-below its long-term trend. The private sector HSBC China Services PMI rose to a seasonally adjusted 53.9 in February, from 52.5 in January.

The MSCI Asia Pacific index lost 0.8 per cent, led lower by Hong Kong’s Hang Seng index, which lost 1.4 per cent to 21,265.31.

“Markets are generally a bit weaker overnight following the softer lead in the US on Friday, while Chinese equities are also off their highs probably on news that the government now aims for a 7.5 per cent growth rate in 2012,” said Jim Reid at Deutsche Bank.

Shares in insurer AIA Group were suspended after US parent group AIG said it was selling as much as $6bn of stock in the company to help repay a US government bail-out.

The news left the rest of the insurance sector weaker, however, and China Life was the index’s biggest faller, down 4.4 per cent to HK$23. Ping An Insurance fell 3 per cent to HK$64.20.

Shanghai’s Composite index lost 0.6 per cent to 2,445.

Japan’s Nikkei Stock Average fell 0.8 per cent to 9,698.59, having hit a fresh seven-month high on Friday, as electronics and other technology groups fell to profit-taking after recent gains.

Olympus fell 5.5 per cent to Y1,256 on reports prosecutors were poised to bring charges against the company for falsifying corporate results.

Electronics component maker TDK fell 3.7 per cent to Y4,190, while Sony , the games console group, lost 3.3 per cent to Y1,691.

In Taipei, shares in companies which supply Apple were traded cautiously ahead of the new iPad launch on Wednesday. Career Technology , the maker of printed circuit boards, fell 5.4 per cent to T$54, while Macronix International , which makes flash memory products, fell 3.6 per cent to T$12.05.

Elsewhere, Seoul’s Kospi index lost 0.9 per cent to 2,016.06 and Sydney’s S&P/ASX 200 shed 0.2 per cent to 4,262.97.