By Daniel Inman
Asian stocks moved higher Thursday, as a strong reading on the state of Chinese factories lifted most markets outside of China.
The initial October reading for China’s manufacturing activity came out at 50.9, compared to a final reading of 50.2 in September. The score was a seven-month high, above the 50 mark that separates expansion and contraction in factory activity.
The preliminary reading was among the first economic data on the region’s largest economy in the third quarter, coming less than a week after figures showed that Chinese growth picked up from a dip in the second quarter.
HSBC’s flash PMI measure of manufacturing has led to some sharp market moves this year, as it pointed to a slowdown in factory activity earlier in the summer before showing signs of improvement in recent months.
Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.05% added 0.3% to 5,372.90, South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.27% ended up 0.5% at 2,046.69 and Japan’s Nikkei /zigman2/quotes/210597971/delayed JP:NIK -0.52% rose 0.4% to 14,486.41.
Thursday’s upbeat reading, however, did little to offset fears over the Chinese economy, as China’s interbank lending rate moved higher for a second day, reviving fears of a liquidity crunch as happened in June. In addition, data showing a further rise in house prices earlier in the week increased concerns that Beijing could step in to cool down the market.
Hong Kong’s Hang Seng index /zigman2/quotes/210598030/delayed HK:HSI +2.28% dropped 0.7% to 22,835.82, and the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +1.55% lost 0.9% to 2,164.32.
Chinese banks recorded substantial losses in Hong Kong, with China Construction Bank /zigman2/quotes/208974133/delayed HK:939 +1.13% /zigman2/quotes/209484779/delayed CICHF +0.43% down 1.9%, and Industrial & Commercial Bank of China /zigman2/quotes/201401473/delayed HK:1398 +1.33% /zigman2/quotes/204265987/delayed IDCBF +5.22% down 1.3%
In currency markets, the Australian dollar /zigman2/quotes/210560947/realtime/sampled AUDUSD +0.4679% climbed as high as 96.71 cents after the Chinese data before easing back to 96.26 cents, little changed from 96.21 U.S. cents late Wednesday in New York.
The yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0182% was steady late at ¥97.34 to the dollar.
Starbucks in China’s crosshairs
China’s state media is criticizing Starbucks for its prices in China. Photo: Getty Images
Japanese companies that produce industrial machinery were pulled lower after Caterpillar shares plunged 6.1% overnight following a cut in its full-year earnings forecast. Hitachi Construction Machinery /zigman2/quotes/205375504/delayed JP:6305 +0.04% /zigman2/quotes/202936726/delayed HTCMF 0.00% lost 1.4% and Komatsu /zigman2/quotes/204002437/delayed JP:6301 -0.59% /zigman2/quotes/206435044/delayed KMTUF -2.18% dropped 2.1%.
Also in Japan, Hitachi /zigman2/quotes/203839937/delayed JP:6501 -1.15% /zigman2/quotes/203416411/delayed HTHIF -0.27% jumped 8.4% after the company more than doubled its net profit outlook for the fiscal half-year ended Sept. 30, due to strength in areas such as electric-power systems.
Add to watchlist
KR:SEU
Add to watchlist
HK:HSI
Add to watchlist
CN:SHCOMP
Add to watchlist
HK:939
Add to watchlist
CICHF
Add to watchlist
HK:1398
Add to watchlist
IDCBF
Add to watchlist
AUDUSD
Add to watchlist
USDJPY
Add to watchlist
JP:6305
Add to watchlist
HTCMF
Add to watchlist
JP:6301
Add to watchlist
KMTUF
Add to watchlist
JP:6501
Add to watchlist
HTHIF
