ASIA MARKETS: Asian Stocks Mostly Up After Upbeat Manufacturing Data From China

By Willa Plank

Signs that China's economy is stabilizing; BOJ holds firm

Asian markets were mixed Tuesday after the release of encouraging economic data from China and decisions by the Bank of Japan and the Reserve Bank of Australia to largely hold their policies steady.

Hong Kong's Hang Seng Index closed up 0.9% and the Shanghai as 0.7% higher. The Hang Seng China Enterprises Index, which tracks large mainland Chinese companies trading in Hong Kong, was up 1.5%. All three indexes were buoyed by better-than-expected data on Chinese manufacturing activity.

China's official manufacturing purchasing managers index rose to 51.2 in October (http://www.marketwatch.com/story/china-manufacturing-pmi-at-highest-since-july-2014-2016-11-01) from 50.4 in September, adding to signs that the world's second-largest economy is stabilizing. A measure above 50 indicates growth.

"It's really good...generally, it's very encouraging," said Margaret Yang, market analyst at CMC Markets, about the PMI data. "I think that it's going to provide support for industrial metals."

Separately, the Caixin manufacturing PMI for China came in at 51.2 in October, up from 50.1 in September.

Japan's central bank kept its policies mostly unchanged (http://www.marketwatch.com/story/bank-of-japan-lowers-inflation-outlook-holds-off-on-more-stimulus-2016-10-31) Tuesday. The BOJ said it would keep its deposit rate steady at minus 0.1% and would continue to target a zero yield for 10-year Japanese government bonds. Its only notable move was to push back the timeline for achieving 2% inflation by one year, to fiscal 2018.

Japan's Nikkei Stock Average closed up slightly at 0.1% after the BOJ decision, while the yen slipped 0.1% against the U.S. dollar.

The Reserve Bank of Australia kept its cash rate target unchanged at 1.5% (http://www.marketwatch.com/story/australias-central-bank-keeps-rates-unchanged-2016-10-31) in a widely expected decision, saying the current rate was consistent with its growth and inflation targets.

The Australian dollar gained 0.7% against the U.S. dollar after the decision, as traders had priced in the possibility of a rate cut.

Australia's S&P/ASX 200 index traded down 0.5%, as Woodside (WPL.AU) eclined 1.3% and BHP Billiton (BHP.AU) was down 1.2%.

South Korea's Kospi benchmark ended slightly down by 0.04% after the release of export data.

Korean exports shrank in October, crimped by the global recall of Samsung Electronics' defective Galaxy Note 7 smartphone. But the pace of decline was slower than in the previous month. Exports declined 3.2% in October from a year earlier, largely in line with the median market forecast for a 3% drop. That followed a 5.9% fall in the previous month. Imports slipped 5.4% from a year earlier.

Analysts said South Korea's overseas shipments would likely stay pressured as the Note 7 debacle continued to drag down Samsung's sales.

Shares of Japanese electronics maker Panasonic (6752.TO) were down 6.5% after the company cut its profit forecast for the fiscal year ending March. Industrial robot maker Fanuc (6954.TO) was down 4.3% in Tokyo after it posted slower sales and profits for the half-year ended September.

The market will be keeping an eye on the U.S. Institute for Supply Management's manufacturing PMI data due later Tuesday, U.S. monthly jobs data set to be released Friday and the nation's presidential election next week.

Read:U.S. stocks set for gains after upbeat Chinese factory data (http://www.marketwatch.com/story/us-stocks-set-for-gains-after-upbeat-chinese-factory-data-2016-11-01)

(END) Dow Jones Newswires

November 01, 2016 06:26 ET (10:26 GMT)

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