HONG KONG (MarketWatch) — Asian stock markets took on a generally upbeat mood Tuesday after data showed Chinese manufacturing activity recovered a bit in July.
Cnooc Ltd. dragged Hong Kong lower in typhoon-disrupted trade amid concerns the Chinese oil giant may have overpaid in its bid to acquire North American energy assets.
China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -2.78% gained 0.2%, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.16% was up 0.3%, and Australia’s S&P/ASX 200 Index /zigman2/quotes/210598100/delayed AU:XJO +0.30% recovered from earlier losses to rise 0.1%.
In other regional action, India’s Sensex /zigman2/quotes/210597966/delayed IN:1 -0.85% was up 0.3% in late trades, while Thailand’s SET added 0.2%.
/zigman2/quotes/210598127/delayed SHCOMP 2,954.38, +14.76, +0.50%
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.25% ended 0.2% lower, while Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.23% ended 0.8% lower after a delayed start as Typhoon Vicente lashed the city with fierce winds and torrential rains.
Markets around the region were heartened by the preliminary findings of HSBC monthly survey of China manufacturers, which showed the monthly Purchasing Managers’ Index rose to 49.5 in July from June’s final reading of 48.2. The July print marked the strongest reading in five months, though overall conditions remained in contraction for a ninth straight month.
A reading below 50 indicates a contraction, while one above reflects an expansion.
Societe General analyst Wei Yao said in a note following the July PMI release that China’s manufacturing contraction would rank as the longest recorded in consecutive month-on-month declines.
“Overall, the report is positive, but the momentum of the manufacturing sector still looks weak. If the production index in the report stays above 50 for one more month, we will be more confident that the growth momentum is truly stabilized,” SocGen’s Yao said in the note.
HSBC’s report showed that an sub-index of manufacturing output rose to 51.2 in July, a nine-month high, from 49.3 in June.
HSBC’s own economist said the PMI showed the Chinese economy in a pick up after the recent interest rate cuts, though demand or employment conditions remain weak. Read more on HSBC China manufacturing data.
Cnooc Ltd. /zigman2/quotes/203421416/delayed HK:883 -0.50% /zigman2/quotes/204964401/composite CEO +0.55% ended 4% lower to rank as the worst performing blue-chip in Hong Kong, with investors skittish following news late Monday of its $15.1 billion deal to buy Calgary-based energy company Nexen Inc..
The deal, China’s biggest overseas acquisition to date, was at a 61% premium to Nexen’s last traded share price. The drop was in line with a 4.3% drop for Cnooc’s American Depository Receipts overnight.
Chinese property names notched gains, as Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 -0.57% added 2.1%i, and Gemdale Corp. /zigman2/quotes/208026094/delayed CN:600383 -0.08% climbed 2.7%.
Elesewhere in Hong Kong, Agile Property Holdings Ltd. /zigman2/quotes/210448079/delayed HK:3383 0.00% /zigman2/quotes/200754284/delayed AGPYY 0.00% fell 0.6%, while China Overseas Land & Investment Ltd. /zigman2/quotes/205731176/delayed HK:688 -1.13% /zigman2/quotes/210412581/delayed CAOVF +4.28% slipped 1.2%.