Asian Shares Advance; China Data Provide Support -- 2nd Update

By Daniel Inman 

HONG KONG--Asian stocks were higher on Thursday, as an improved reading on China's manufacturing sector eased some concerns over the health of the Chinese economy.

Hong Kong's Hang Seng Index was up 0.5% at 22953.76 and the Hang Seng China Enterprises Index rose by 1.1% to 10109.57 after HSBC's China preliminary manufacturing Purchasing Managers Index came out at 49.7 for May, a sharp increase from a final reading of 48.1 in April.

Although the measure remains just below 50, indicating manufacturing is still contracting, the latest number points to stabilization in activity among China's factories and is the strongest showing in five months.

In Hong Kong, gas companies were higher after Moscow and Beijing signed a contract to supply China with hundreds of billions of Russian natural gas. China Resources Gas Group and China Gas Holdings--two companies with a strong presence in northeastern China, where there has been a shortage in supply--rose 3.9% and 6%, respectively.

Shares in bullet-train maker China CNR Corp. edged 1.9% lower in debut trading, after the company raised $1.2 billion in an initial public offering--Hong Kong's first big issuance since the collapse of a listing by WH Group.

In addition to the manufacturing data, a positive overnight session in the U.S. also helped Asian stocks. The Dow Jones Industrial Average enjoyed its largest gain in more than a month on Wednesday, as minutes from the Federal Reserve's April meeting showed that officials discussed how they would eventually raise interest rates, but that their outlook hadn't changed enough to warrant a policy shift.

South Korea's Kospi rose 0.4% to 2015.59, Australia's S&P/ASX 200 rose 1% to 5479.90, and the Philippines' PSEi was up 1% at 6830.58. The Shanghai Composite lost 0.2% to 2021.29.

In Japan, the Nikkei added 2.1% to 14337.79, outperforming the rest of the region as the market was helped by a softer yen, as the safe-haven currency weakened in the wake of the Chinese manufacturing data.

The positive global tone helped the yen soften from the three-month high it reached against the dollar on Wednesday, a move brought about by signals from Bank of Japan Gov. Haruhiko Kuroda that further monetary easing is unlikely in the near term. The yen was last trading at Yen101.57 to the dollar, softer in Asian trade, and weaker than the Yen100.81 it reached in the previous session.

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