Feb. 1, 2011, 8:54 a.m. EST

Asia Mostly Rises Amid Mixed Data

By Lisa Twaronite in Tokyo and Colin Ng and Pura Rajeev in Singapore

Asian stock markets were mostly higher Tuesday, with choppy trading in China ahead of this week's Lunar New Year holiday.

Reports painted a mixed picture of China's manufacturing sector.

China's official PMI, published by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, fell to 52.9 in January from 53.9 in December. But a competing PMI put out by HSBC Holdings showed a modest rise to 54.5 from 54.4 in December, suggesting that further policy tightening from Beijing remains in the cards.

"The falling PMI might add worries to a market that is already concerned about slowing growth due to tightening measures," Ting Lu , an economist with Bank of America Merrill Lynch, said in a note.

A PMI reading above 50 indicates an expansion in manufacturing activity, while a reading below 50 indicates contraction.

In the Markets

Sentiment in Asia got a boost from the Dow Jones Industrial Average's showing on Monday, when it rose 0.6% and added 2.7% for the month, its best January performance in 14 years, helped by better-than-expected readings for U.S. consumer spending and the Chicago Business Barometer.

In Shanghai, the market was supported by gains in resources and energy stocks after commodity prices surged Monday. The Shanghai Composite rose 0.3% to 2798.96. Aluminum Corp. of China, or Chalco, climbed 2.8%

In Tokyo, Japan's Nikkei Stock Average ended up 0.4% at 10274.50, supported by solid corporate earnings and the euro's recent gains against the yen.

Among companies that released earnings on Monday, Honda Motor (NYS:HMC) rose 2% after it raised its fiscal year net-profit forecast. Inpex rose 2.3%, helped by Monday's jump in crude-oil prices.

Electronics parts maker TDK (TKS:JP:6762) jumped 3.2% after announcing a 43% on-year increase in net profit for its third quarter.

However, Daihatsu Motor dropped 4.5% after the company left its guidance for the full fiscal year through March unchanged.

On the downside in Asia, Indian shares fell for a fifth straight session to a five-month low as foreign institutions used early gains to resume selling in stocks. The Bombay Stock Exchange's Sensitive Index slipped 1.7% to 18022.22 as heavyweight Reliance Industries fell 2.6%.

Tata Motors led declines in auto shares after it said sales of its Indica small car fell 8% from a year earlier in January, while sales of medium and heavy commercial vehicles grew only 5%. The stock slumped 6.9%

Australia's S&P/ASX 200 erased gains and ended mostly flat after the Reserve Bank of Australia held policy steady at 4.75% but gave hints that some analysts said portend more tightening later.

Insurers fell as tropical cyclone Yasi approached Queensland state, which has already been battered by floods. Suncorp Group (ASX:AU:SUN) slid 3%, Insurance Australia Group declined IAG 2.1% and QBE Insurance Group (ASX:AU:QBE) fell 1.5%.

The Lunar New Year holiday started early in Taiwan and Vietnam, with markets in China and South Korea joining on Wednesday. Many other markets, including Hong Kong, Singapore, Malaysia and Indonesia, will be closed Thursday and Friday.

Write to Lisa Twaronite at lisa.twaronite@dowjones.com and Colin Ng at colin.ng@dowjones.com

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