HONG KONG (MarketWatch) — Most Asian stocks overcame choppy movements to end higher Friday, as investors remained optimistic about the Chinese economic outlook despite a mild disappointment over official data on the country’s manufacturing sector.
Japanese shares finished higher as the yen fell to multi-year lows against the euro and the U.S. dollar, while mainland Chinese stocks rebounded from early weakness on an afternoon rally in banking shares.
China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -1.25% was the day’s best performer, rising 1.4% to 2,419.02. The index had dropped as low as 2,369.57 earlier in the day, after an official gauge of manufacturing Purchasing Managers’ Index slipped to 50.4 in January from December’s 50.6.
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A separate PMI measure from HSBC climbed to 52.3 from 51.5 in December, rising further above the 50-point level, which indicates an expansion in activity. Read: China’s manufacturing improves, surveys show.
“The key is that it is still above 50, so there is still growth, but signs of a slight faltering. Considering the U.S. fiscal situation and the general slowdown in Europe, I think the number is still encouraging,” said Andrew Sullivan, head of sales trading at Kim Eng Securities.
“These PMI numbers support our impression that China’s economy entered 2013 with solid growth momentum after the strong sequential expansion” in the fourth quarter of 2012, said Louis Kuijs, an economist at The Royal Bank of Scotland.
Other HSBC PMI data releases for the region showed an improvement in Taiwan and Vietnam, but a slowdown or a contraction in manufacturing activity in India, South Korea and Indonesia.
Meanwhile, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -3.34% rose 0.5%, Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -1.60% advanced 0.9% and Taiwan’s Taiex edged up 0.1%.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.27% ended little changed after moving in both directions, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.18% slipped 0.2%.
Regional stocks also posted strong gains for the week, led by a 5.6% surge for the Shanghai Composite, while the benchmarks in Japan and Taiwan rose more than 2%.
Banking stocks climbed on mainland Chinese bourses after a local media report said lending at China’s four biggest state-owned banks rose in January. Read: China Big 4 banks' new loans up from year earlier.
Agricultural Bank of China Ltd. /zigman2/quotes/207749118/delayed ACGBY -2.16% /zigman2/quotes/204629388/delayed CN:601288 -0.87% climbed 2%, while China Construction Bank Corp. /zigman2/quotes/208058581/delayed CN:601939 -1.04% /zigman2/quotes/207732534/delayed CICHY -3.19% and Bank of China Ltd. /zigman2/quotes/201568493/delayed BACHY -2.75% /zigman2/quotes/209359942/delayed CN:601988 -0.56% each rose 1.6%.
/zigman2/quotes/210597971/delayed NIK 22,605.41, -781.33, -3.34%
The advance in Tokyo came as the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0966% climbed as high as ¥92.28, a level not seen since June 2010, rising from late Thursday’s ¥91.46. Read: Dollar slips vs euro as Fed plan sinks in.
Data released earlier in the day showed Japan’s unemployment rate increased to 4.2% in December, while household spending declined. Read: Japan jobless, household spending data disappoint.
A slew of positive earnings reports or news also helped the market.
Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -5.66% /zigman2/quotes/207472799/delayed SHCAF +3.24% soared 5.8% after a Nikkei news report that strong smartphone earnings allowed the company to swing back to an operating profit in the October-December quarter.
On the downside, shares of Nomura Holdings Inc. /zigman2/quotes/206251373/delayed JP:8604 -5.20% /zigman2/quotes/207276383/composite NMR -4.00% dropped 2.7%, on profit-taking following gains of more than 80% since mid-November, despite news that the securities broker had posted a more-than-sevenfold rise in October-December profit from the preceding quarter. Read: Nomura Holdings quarterly profit leaps.
Also losing ground, TDK Corp. /zigman2/quotes/208948266/delayed JP:6762 -3.01% /zigman2/quotes/203182885/delayed TTDKF -1.67% fell 6.8%, and Kyocera Corp. /zigman2/quotes/204880749/delayed JP:6971 -3.66% dropped 1.8%, after both firms downgraded fiscal-year profit guidance.
Shares of Honda Motor Co. /zigman2/quotes/200490352/delayed JP:7267 -3.42% /zigman2/quotes/207173990/composite HMC -3.73% rose 0.3% on the weakened yen, but underperformed the market after the auto maker also cut its fiscal-year profit forecast. Read: Honda earnings rise, but forecast trimmed.