Asia report: Stocks rise on Fed sentiment, data from China and Korea
Equity markets were in the green across the Asia-Pacific region on Thursday, as investors reacted to signals from across the Pacific that the Federal Reserve was looking at smaller interest rate rises going forward.
In Japan, the Nikkei 225 was up 0.92% at 28,226.08, as the yen strengthened 1.17% on the dollar to last trade at JPY 136.45.
Robotics specialist Fanuc was up 0.98%, Uniqlo owner Fast Retailing added 2.44%, and tech investing giant SoftBank Group added 1.6%.
The broader Topix index eked out gains of 0.05% by the end of trading in Tokyo, settling at 1,986.46.
On the mainland, the Shanghai Composite was ahead 0.45% at 3,165.47, and the technology-centric Shenzhen Component jumped 1.4% to 11,264.16.
Fresh data out of China showed the country’s industrial sector contracting less than expected in November.
The Caixin/Markit manufacturing purchasing managers’ index came in at 49.4 for the month, rising from 49.2 in October and above the 48.9 reading pencilled in by economists polled by Reuters.
It was, however, still below the 50-point level that separates expansion from contraction.
The Caixin data came after Beijing’s official manufacturing PMI came in at 48 on Wednesday for a second consecutive month in contraction territory.
Official PMI readings from the National Bureau of Statistics are seen as representing large, state-affiliated industry in the People’s Republic, while the Caixin data is understood as more reflective of small-to-medium trade in the country.
South Korea’s Kospi was 0.3% higher at 2,479.84, while the Hang Seng Index in Hong Kong rose 0.75% to 18,736.44.
The Korean economy expanded faster in the third quarter according to revised data, with gross domestic product rising 3.1% year-on-year, compared to the second quarter’s 2.9% improvement.
Quarter-on-quarter growth slowed, however, to 0.3%, from 0.7% in the second three months of the year.
In other data out of Seoul, the country’s trade deficit came in well above expectations for November at $7.01bn, compared to the $4.42bn anticipated by markets.
Exports from South Korea contracted by 14%, more than the 11% drop pencilled in, while imports were up more than expected by 2.7%.
The blue-chip technology stocks were mixed in South Korea, with Samsung Electronics up 0.64%, while SK Hynix lost 0.35%.
“The PMIs for Korea, Japan and China all show sub-50 readings for output, overall new orders and exports orders in November, indicating general declines in manufacturing activity and in expected demand at home and abroad,” said Duncan Wrigley at Pantheon Macroeconomics.
“The readings are somewhat surprisingly the lowest for Japan, falling to around 45 for all three indicators.”
Wrigley said that would confirm the Bank of Japan’s view that current inflation was transitory, given weak domestic demand and a cooling global economy.
“Nothing in the data is likely to shift the Bank’s determination to stick with easy monetary policy settings.”
Oil prices were in the red as the region went to bed, with Brent crude futures last down 0.08% on ICE at $86.90 per barrel, and the NYMEX quote for West Texas Intermediate falling 0.04% to $80.52.
In Australia, the S&P/ASX 200 gained 0.96% to 7,354.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 added 0.89% to 11,654.56.
The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.21% at AUD 1.4701, and the Kiwi advancing 0.7% to NZD 1.5770.
Reporting by Josh White for Sharecast.com.