ASIA MARKETS: Japan, Australia Stocks Rise; China Data In Focus

By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Japanese and Australian shares rose Thursday after the U.S. economy grew faster than expected and the Federal Reserve offered no guidance on when it will scale back its bond purchases.

Japan's Nikkei Stock Average endured a volatile start to climb 0.4%, also aided by a string of strong earnings reports, including from two of the nation's largest banks, as well as Panasonic Corp. and Tokyo Electric Power Co.

Australia's S&P/ASX 200 rose 0.4%, but South Korea's Kospi gave up 0.1%.

"The main event of the week has come and gone now, and it seems to have left market participants with a bit more confusion. While there were no major surprises from the Fed, analysts feel the statement was slightly more dovish," said IG Markets strategist Stan Shamu.

Shamu was referring to the Federal Reserve's statement overnight after a two-day meeting which gave no hint of plans to pare the U.S. central bank's $85 billion-a-month in asset purchases. Data released Wednesday by the Commerce Department showed the U.S. economy grew at an annual rate of 1.7% in the second-quarter, beating expectations for a 1% expansion.

Following the Fed's statement, investors turned their attention to the final result of HSBC's survey on Chinese manufacturing conditions in July.

An official Chinese survey released earlier Thursday showed the Purchasing Managers' Index for the sector unexpectedly rose to 50.3 in July, from 50.1 in June. A reading above 50 indicates an improvement, while one below shows a deterioration in conditions at factories.

"If Chinese manufacturing data today show that economic growth is deteriorating at an accelerated rate, we could see this recent momentum halted, particularly in materials stocks," said Rivkin Securities global analyst Tim Radford in reference to the Australian resource sector.

Australian energy and retail groups advanced, with Woodside Petroleum Ltd. (WOPEY) climbing 1.9%, and Wesfarmers Ltd. (WFAFY) rising 0.6%.

But banks were mostly lower as the high-dividend-yield sector felt the weight of the Australian dollar's (AUDUSD) drop to a nearly three-year low Wednesday. Among them, Commonwealth Bank of Australia (CBAUY) eased 0.7%.

In Tokyo, a slew of earnings reports released late on Wednesday influenced stock moves.

Panasonic (PCRFY) jumped 4.2% after its operating results beat estimates, and Tokyo Electric (TKECY) soared 5.7% after the company swung back to a quarterly profit.

Mitsubishi UFJ Financial Group Inc. (MTU) rose 0.8% after its quarterly profit rose 40%, while Mizuho Financial Group Inc. (MFG) gained 1% following a 35% improvement in net profit.

On the downside, shares of Honda (HMC) tumbled 3.3% after a drop in profits, while Mazda Motor Corp. (MZDAY) gave up 2.4% after also reporting its results.

Sony Corp. (SNE) fell 1.6% after the Nikkei newspaper reported its board may reject a proposal from U.S. hedge fund Third Point to spin off its entertainment division.

Trading in shares of Sharp Corp. (SHCAY) was halted after a local media report said it was going to raise funds via a public share offering.

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