Asian Shares Rise as Investors Peruse Economic Data

By Investors Hub

Asian stocks rose on Wednesday as investors digested a slew of economic data, corporate earnings results and weaker than expected Chinese manufacturing data.

China’s Shanghai Composite Index rallied 34.73 points or 1.4 percent to close at 2,602.78, a day after the country’s securities regulator promised measures to improve market liquidity, encourage share buybacks and mergers and acquisitions. Hong Kong’s Hang Seng Index jumped 394.16 points or 1.6 percent to 24,979.69.

Traders ignored the latest PMI numbers confirming a broad-based decline in Chinese economic activity.

China’s official manufacturing PMI fell to 50.2 in October, the lowest since July of 2016 and down from 50.8 in September, in a sign of further loss of momentum in the world’s second-largest economy.

The services PMI dropped from 54.9 to 53.9, marking the weakest pace of expansion since August of 2017.

On the heels of the disappointing data, the People’s Bank of China weakened the yuan fix to the lowest in more than a decade.

Japanese shares hit a one-week high and the yen edged lower against the dollar after the Bank of Japan left interest rates steady, cut its inflation forecasts and signaled it was a long way off from exiting its massive stimulus program.

Investors shrugged off weak data showing that industrial production in the country fell 1.1 percent in September from the previous month compared to expectations for a decline of 0.3 percent.

The Nikkei 225 Index surged up 463.17 points or 2.2 percent to 21,920.46, while the broader Topix Index closed 2.2 percent higher at 1,646.12.

Chip-related stocks followed their U.S. peers higher, with Tokyo Electron rallying 3.6 percent and TDK Corp spiking 6.1 percent. Advantest shares soared 13 percent. Sony jumped 4.7 percent and Honda Motor surged up 6.5 percent after raising their annual profit forecasts.

Australian markets ended modestly higher, led by banking and energy stocks. The benchmark S&P/ASX 200 Index rose 25.20 points or 0.4 percent to 5830.30 but ended the month down over 6 percent, marking its worst monthly fall since August of 2015. The broader All Ordinaries Index also closed up 0.4 percent at 5,913.30.

The Australian dollar fell slightly after a government report showed inflation rose 0.4 percent sequentially in the third quarter of 2018, below market expectations for a 0.5 percent increase.

ANZ rose over 1 percent after reporting a 5 percent drop in full-year cash profit, hit by remediation costs in the aftermath of the royal commission.

Commonwealth Bank advanced 1.6 percent after it agreed to sell its Colonial First State asset management business to Japanese bank Mitsubishi UFJ Trust and Banking Corp for A$4.13 billion.

QBE Insurance rallied 2.4 percent after it announced a streamlining of its operations.

Oil stocks also closed broadly higher as oil prices rose for the first time in three sessions. Woodside Petroleum climbed 2.3 percent, Origin Energy added 1.7 percent and Oil Search gained 0.8 percent.

Meanwhile, mining heavyweights BHP Billiton and Rio Tinto ended marginally lower. Gold miners Evolution and Newcrest also slumped after gold prices settled at a more than one-week low overnight.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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