Asia report: Markets finish higher after wave of economic data

Asia-Pacific markets experienced gains at the week’s close, driven by fresh data insights into the region’s business activity.

China’s service sector exhibited accelerated growth in October, contributing to the region’s overall positive sentiment.

Conversely, Hong Kong’s private sector activity declined further during the same month.

“Asia stocks experienced gains as they followed the upward movement in global markets,” said TickMill market analyst Patrick Munnelly.

“This rise came after the Bank of England decided to maintain interest rates and a surprising decrease in US labour costs added to a dovish tone.”

Munnelly noted that Japan’s market was closed for a holiday, while a disappointing Caixin services PMI did not halt the overall positive momentum.

“The Hang Seng in Hong Kong and the Shanghai Composite in China followed the general optimistic mood, largely ignoring weaker Chinese Caixin PMI data and another significant liquidity drain by the People’s Bank of China.”

Equity markets advance across the region

Japanese markets remained closed for the country’s Culture Day holiday.

In mainland China, the Shanghai Composite saw a 0.71% increase, closing at 3,030.80, while the Shenzhen Component jumped 1.22% to 9,853.89.

Notable performers in Shanghai included Guangzhou Tongda Auto Electric, up 10.04%; Flying Technology Co, ahead 10.03%; and Fujian Longxi Bearing Group, closing 10% firmer.

In Hong Kong, the Hang Seng Index saw substantial growth of 2.52% to 17,664.12, with key contributors including Sino Biopharmaceutical, which rose 9.06%; Zhongsheng Group Holdings, ahead 8.11%; and Li Ning Co, which was 6.58% higher.

South Korea’s Kospi increased by 1.08%, closing at 2,368.34, with solid performances from NCsoft Corporation, KakaoPay and SK Innovation, which rose by 8.61%, 8.02% and 7.45%, respectively.

Australia’s S&P/ASX 200 rose 1.14% to 6,978.20, with Block rocketing 25.18%, while Sandfire Resources and Zimplats Holdings ahead a respective 6.01% and 5.26%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 increased 0.67%, closing at 11,118.92.

Top performers in Wellington included Tourism Holdings, up 5.97%; Scales Corporation, ahead 5.44%; and KMD Brands, which was 4.82% firmer.

In currency markets, the dollar was last down 0.11% on the yen, trading at JPY 150.29.

The greenback was meanwhile 0.14% weaker against the Aussie at AUD 1.5520, while it slipped 0.38% on the Kiwi to change hands at NZD 1.6889.

In oil markets, Brent crude futures were last down 0.22% on ICE at $86.66 per barrel, while the NYMEX quote for West Texas Intermediate was off 0.12% at $82.36.

Mixed economic performance in Asia-Pacific data dump

In economic news, China’s service sector showed modest growth in October, as the Caixin services purchasing managers index (PMI) came in at 50.4, slightly higher than September’s 50.2.

The above-50 reading signalled sustained expansion and meant China’s services sector had remained in expansionary territory for 10 consecutive months.

“China’s services sector recovery is likely to continue to ebb, after a marked reopening rebound this year,” said Pantheon Macroeconomics chief China economist Duncan Wrigley.

“People have been more willing to spend on services than goods and are worried about the murky income outlook, amid the subdued labour market.”

Wrigley said China’s consumption-support policies had focussed on the supply side, such as putting on more concerts, car shows and domestic tourism facilities, which likely had more traction during the warm summer months.

“We see few short-term catalysts for consumption to lead growth, given that policymakers oppose cash handouts to households, which they see as encouraging laziness.”

Hong Kong meanwhile faced challenges in its private sector, as S&P Global’s survey indicated a contraction in October.

The seasonally adjusted Hong Kong PMI fell to 48.9 from September’s 49.6, marking the fourth consecutive month of contraction.

Reduced new business, including from mainland China, contributed to the decline, while hiring activity also decreased, and input costs continued to outpace selling prices.

Australia’s retail sector painted a brighter picture, as retail sales recorded a 0.2% quarter-on-quarter increase in the three months ending in September.

That growth surpassed expectations, as economists had pencilled in a 0.2% decline.

It marked the first rise in retail sales since the third quarter of 2022, rebounding from a 0.5% decline in the second quarter.

However, on a seasonally adjusted year-on-year basis, retail sales still fell by 1.7%.

Finally on data, India’s services industry experienced a slowdown in October, with the S&P Global India services PMI expanding at a rate of 58.4.

Although that indicated growth, it was the slowest pace in seven months, down from September’s 61.0.

Reporting by Josh White for Sharecast.com.