Asia’s major stock markets traded mostly higher Monday after upbeat Chinese manufacturing data, though Chinese markets themselves struggled.
Japan’s Nikkei Stock Average climbed 0.6%, Australia’s S&P/ASX 200 index advanced 0.5%, and South Korea’s Kospi rose 0.4%.
Taiwan’s Taiex added 0.2%, as did Singapore’s Straits Times Index .
However, Hong Kong’s Hang Seng Index fell 0.1% after rising 0.6% in early moves to near its highest level for the year, while the Shanghai Composite Index saw brief post-data gains evaporate to trade 0.3% lower.
U.S. stock performance Friday offered Asia investors a subdued lead, with Wall Street closing around the flat line as investors worried about the so-called fiscal cliff of looming automatic tax hike and spending cuts.
Still, weekend data from China gave Asia investors some reason for optimism, as the government-sponsored version of the November manufacturing Purchasing Managers’ Index rose to 50.6, up 0.4 point over October.
The result was just below economist expectations, but above the 50-mark separating growth from contraction.
Meanwhile, the final version of HSBC’s privately compiled version of the China manufacturing PMI index, released Monday, also showed an improvement, rising to 50.5 from 49.5 in October for its first move above 50 in more than a year.
HSBC chief China economist Hongbin Qu said the data confirmed “that Chinese economy continues to recover gradually. We expect [gross domestic product] growth to rebound modestly to around 8% in the fourth quarter as the easing measures continue to filter through.”
The PMI results helped boost Asian shares outside of China, at least.
“Signs of a turnaround in the Chinese economy translated into a sprightly start to the week for Asian markets, despite there still being little advancement in the U.S. regarding avoidance of the fiscal cliff,” wrote CMC senior trade Tim Waterer.
But on the Chinese bourses, brief gains fueled by Monday’s HSBC PMI numbers proved fleeting, with the early advance vanishing by the late morning.
Ben Kwong, chief operating officer at KGI Asia, said that Chinese share market performance currently isn’t taking its cues from the economic outlook but is reflecting structural problems, including weak investor confidence.
“That’s why, despite the economic outlook being quite upbeat, the A-shares market is pretty weak. It’s dragging down Hong Kong as well,” he said.
Banks were among the weak spots in Shangai trading Monday, with China Merchants Bank Co. down 1.7% and Bank of Communications Co. down 1%.
Chinese property firms saw an early rally, helped by separate statistics showing the average housing price in 100 Chinese cities accelerated their gains in November.
Some property shares held those gains, with Agile Property Holdings Ltd. up 3.3%, and Hong Kong’s Wharf Holdings Ltd. adding 2.8%.
But other names saw the early advance disappear, with China Resources Land Ltd. trading 0.2% lower, swinging from a 2.9% gain early in the day.
In mainland trading, the real-estate rally proved more durable, with China Vanke Co. rising 2.1% in Shenzhen, and Gemdale Corp. surging 4.2% and Poly Real Estate Group Co. jumping 3.5% in Shanghai.
Back in Hong Kong, top-weighted Hang Seng Index component HSBC Holdings PLC added 0.6% in Hong Kong after its plan to buy Royal Bank of Scotland Group PLC’s Indian assets collapsed.
But shares of Cathay Pacific Airways Ltd. lost 1.3% as CNBC reported the airline’s staff was unhappy with the size of a planned salary hike, with labor action a possibility.
Despite gloom on the Chinese mainland, the tone of the Hong Kong market remained “quite firm,” said Kwong.
“If there is progress on the fiscal cliff, then overseas markets will grind up, and that’s positive for Hong Kong,” he said, adding that the Hong Kong market had seen recent fund inflows from offshore investors.
In Tokyo, Japanese industrial firms with exposure to China were among the advancers.
Hitachi Construction Machinery Co. — which saw almost 10% of its fiscal first-half sales derived from China — moved 1.9% higher. Japan Steel Works Ltd. advanced 2.4%. and Sumitomo Heavy industries Ltd. rallied 3.8%.
Technology firms likewise gained ground in Japan, as the yen extended its recent downward march, sending the dollar and euro near their highest levels against the currency since April.
Renesas Electronics Corp. rose 0.7%, Canon Inc. climbed 2.9%, and Panasonic Corp. advanced 1%.
Tech firms gained in South Korea, along with autos. Samsung Electronics Co. rose 1.2%, while Kia Motors Corp. climbed 1.5%, and Hyundai Motor Co. advanced 1.8%.
In Australia, financials saw some buying, with Australia & New Zealand Banking Corp. up 1.4%, and asset-manager AMP Ltd. trading 2.2% higher.
Major department-store operators fell in Sydney, however, with David Jones Ltd. down 2% and Myer Holdings Ltd. lower by 1.4%, after data showed that adjusted Australian retail sales for November were unchanged, missing consensus expectations for a 0.4% advance.
Resource firms were broadly lower across the region after a relatively poor session for metals on New York on Friday, with gold miners particularly weak. Newcrest Mining Ltd. declined 1.8% in Sydney, and Zijin Mining Group Co. fell 1.6% in Hong Kong.
Nomura Asia equity strategist Michael Kurtz holds a broadly upbeat stance on Asia stocks as the year-end approaches, saying that while “the U.S. ‘fiscal cliff’ is center-screen … looking past it, U.S. and Chinese demand are on a vital upswing.”
Kurtz believes that “a number of political and economic clouds that darkened the investment landscape during much of 2012 have begun to clear,” and that this development opens the way “for a less tortuous upward path for stocks for much of 2013” in Asia.
Marketwatch
