SYDNEY (MarketWatch) — Asian equity markets were mostly higher on the first trading day of the new month, with sentiment supported Thursday by signs of an improvement in Chinese and U.S. manufacturing data.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.23% rose 0.3%, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.25% advanced 1.2%, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.16% traded flat, while Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.30% added 0.3%.
Bucking the trend, China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -2.78% declined 0.4%.
Asian shares dropped heavily in August as investors fretted about U.S. economic growth, although gloom started to lift by the end of the month, after the U.S. Federal Reserve signaled that it may act to support the economy.
U.S. stocks gained for a fourth straight session on Wednesday, also helped by above-forecast manufacturing data. Chinese manufacturing purchasing managers index (PMI) data out Thursday also showed an improvement. Read more on China’s PMI.
“Some upbeat economic news from the U.S. yesterday in the shape of better-than-expected Chicago PMI has certainly given the majority of Asian markets a solid start to the new trading month, with this sentiment being reinforced by expansion in the Chinese PMI readings,” said Cameron Peacock, a strategist at IG Markets.
Strategists at Societe Generale said upcoming data will also be key. “Positive economic surprises are like flowers in the snow — it is unfortunate that glaciers are still ahead for the next month. Markets will now focus on the U.S. ISM [due Thursday] and U.S. non-farm payrolls prints [due Friday] which may just be solid enough to support equities.”
Gainers on Thursday included exporters, with shares of technology firm Samsung Electronics Co. /zigman2/quotes/203012110/delayed SSNGY 0.00% gaining 3.6% in South Korea.
Casio Computer Co. /zigman2/quotes/202492162/delayed JP:6952 +1.88% /zigman2/quotes/206719136/delayed CSIOY +0.40% climbed 3.9% and Kyocera Corp. /zigman2/quotes/204880749/delayed JP:6971 +0.01% /zigman2/quotes/205094593/delayed KYOCF -1.20% rose 2.3% in Tokyo.
The Japanese government announced it would invest $2.6 billion into a major new small-flat-screen joint venture linking Sony Corp. /zigman2/quotes/201361720/delayed JP:6758 +0.17% /zigman2/quotes/208567357/composite SNE +0.27% , Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 +0.27% /zigman2/quotes/204149068/delayed TOSYY +0.06% and Hitachi Ltd. /zigman2/quotes/203839937/delayed JP:6501 -0.15% .
Sony shares rose 2%, Toshiba climbed 0.9%, and Hitachi gained 1%.
Tech-sector gains spread to Hong Kong trading, with Foxconn International Holdings Ltd. /zigman2/quotes/205017351/delayed HK:2038 -0.96% /zigman2/quotes/207122890/delayed FXCNF +26.13% up 2.1%. Goldman Sachs upgraded the firm to neutral from sell, with the broker saying that it believes further share price downside is limited.
Strong first half margins “indicated it has effectively realigned its cost structure despite facing input cost hikes,” the broker said.
Still, companies linked to the mainland Chinese economy came under some selling pressure, with Agricultural Bank of China Ltd. /zigman2/quotes/204629388/delayed CN:601288 +0.28% /zigman2/quotes/207749118/delayed ACGBY +1.09% /zigman2/quotes/200705246/delayed HK:1288 +0.63% down 0.4% in Shanghai.
The input price components of the Chinese PMI data showed that inflation remained elevated in July. The Chinese government has been acting to curb inflation by tightening monetary policy, prompting worries of a hard-landing for the economy.
Also supporting the Japanese share market, steel makers posted notable gains, with Kobe Steel Ltd /zigman2/quotes/207391157/delayed JP:5406 +2.32% up 2.8%, and JFE Holdings Inc. /zigman2/quotes/204336633/delayed JP:5411 +2.10% up 2.8%.
The Nikkei reported that a stronger yen and lower prices for commodities are likely to reduce the burden of raw-material costs for Japan’s four biggest steel firms in fiscal 2012 by around 200 billion yen ($2.59 billion).
In Sydney trading, retail stocks accelerated gains after a July sales report beat expectations with a rise of 0.5%. Read more on Australian retail sales.
“The magnitude of surprise is not that significant, but it does break a constant stream of bad news around Australian consumption over the past few months,” said Peter Esho from City Index in Sydney.
Shares in Myer Holdings Ltd. /zigman2/quotes/200987583/delayed AU:MYR 0.00% rose 2.8%, and Woolworths Ltd. /zigman2/quotes/209906204/delayed AU:WOW -0.08% /zigman2/quotes/206970894/delayed WOLZY 0.00% gained 1.1%.