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Survey on China manufacturing lifts Asia stocks

10:14 PM, Nov 21, 2012   |    comments
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HSBC's Purchasing Managers' Index, which combines various measures of manufacturing activity in China, rose to 50.4 for November. That was up from October's PMI of 49.5 and September's PMI of 47.9. Readings above 50 denote growth. It was first expansion in 13 months.

The survey shows that the "economic recovery continues to gain momentum towards the year end," analysts at HSBC said. "However, it is still the early stage of recovery and global economic growth remains fragile."

Japan's Nikkei 225 index rose 1.1 percent to 9,319.36 - its highest level since May 2 - as a recently weakened yen provided a vital boost to the export-heavy index.

Hong Kong's Hang Seng added 0.5 percent to 21,622.82. South Korea's Kospi added 0.8 percent to 1,898.25 and Australia's S&P/ASX 200 jumped 1.3 percent to 4,424.20. Benchmarks in Singapore and Taiwan rose.

Positive news out of Europe and the U.S. also helped sustain investor confidence. In Europe, finance ministers from the 17 countries that use the euro will continue talks Monday to reach an agreement on releasing more money to debt-crippled Greece. Athens is expected to eventually get an overdue (EURO)31.5 billion ($40 billion) loan payment urgently needed to pay its bills.

Investors are also expecting a resolution to the U.S. "fiscal cliff" of tax increases and government spending cuts that are set to take effect Jan. 1 unless Congress and the Obama administration reach a deal first.

Independent analyst Andrew Sullivan in Hong Kong said overall investment sentiment could improve once that issue is dealt with. Traders are also keeping an eye on Japan's election on Dec. 16, which could usher in new leaders calling for bold monetary policies to get the country out of deflation.

"I think over the next few weeks we will see the market continue to grind higher," Sullivan said. "That will give equity investors more confidence as prospects improve."

Among individual stocks, Japan's export shares were among the big gainers. Yamaha Motor Co. jumped 4 percent. Sharp Corp. gained 4.3 percent.

South Korean construction shares also rose. Hyundai Engineering & Construction gained 2.7 percent, while Daewoo Engineering & Construction added 1.5 percent. In Hong Kong, China Mobile Ltd. rose 1 percent.

Wall Street got a slight bounce Wednesday after news broke of a cease-fire agreement between Israel and the Hamas militant group to end eight days of fierce fighting in the Gaza Strip.

The Dow Jones industrial average rose 0.4 percent to 12,836.89. The Standard & Poor's 500 index rose 0.2 percent to 1,391.03. The Nasdaq composite index rose 0.3 percent to 2,926.55.

The U.S. stock market will be closed Thursday for the Thanksgiving holiday and will close early Friday.

Benchmark crude for January delivery was up 22 cents to $87.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 63 cents to finish at $87.38 on the Nymex on Wednesday.

In currencies, the euro rose to $1.2850 from $1.2825 late Wednesday in New York. The dollar slipped to 82.46 yen from 82.49 yen.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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