News Column

Asia perks on China data

May 22, 2014



Asian stocks rallied on Thursday, bolstered by better-than-expected Chinese manufacturing PMI data and overnight gains on Wall Street.

Japan'sNikkei 225 index vaulted 295.62 points, or 2.1%, to 14,337.79, while the yen dropped to ¥101.557 per U.S. dollar, compared with ¥101.433 in the previous session.

The Hang Seng Index in Hong Kong jumped 117.24 points, or 0.5%, to 22,953.76

Australia's benchmark added 1%, and the Australian dollar strengthened to 92.60 U.S. cents from 92.39 U.S. cents on Wednesday.

Among the market movers, Japanese broker Dawai Securities Group jumped 4%, investment bank Nomura Holdings climbed 3.9%, electronic components maker Alps Electric gained 3.1%, telecoms giant SoftBank Corp. rose 2.6% and tech major Sharp Corp. tacked on 2.3%.

In Hong Kong, PetroChina Co. moved up 1.8%, after its parent company China National Petroleum Corp. signed a multi-billion-dollar deal with Russia's natural-gas giant Gazprom.

According to the deal, Gazprom would supply CNPC, China's largest oil and gas producer, with natural gas for 30 years, starting in 2018.

Meanwhile, Chinese computer maker Lenovo Group extended gains from the previous session and closed 0.3% higher, after its net profit jumped 29% for the fiscal year ended in March.

However, Chinese railroad major China CNR Corp. dropped in its first day of trading in Hong Kong, down 1.6% from its IPO price.

In Australia, top gainers included alumina refiner Alumina, up 7.1%, iron-ore producer Fortescue Metals Group, up 3.6%, and mining giant Rio Tinto, up 2.6%.

CHINA

Shanghai's CSI 300 Composite ducked back 4.79 points, or 0.2%, to 2,131.11

A report by HSBC on Thursday showed that China's manufacturing activity recovered at a faster-than-expected pace in May, sending stocks higher across the region. An overnight advance in the U.S. stocks also set the stage for gains.

HSBC said the preliminary or "flash" version of its monthly PMI headline number rose to a five-month high of 49.7 from a final reading of 48.1 in April.

Perhaps even more encouraging, the output subindex was at a four-month high of 50.3, from 47.9 in April, breaking above the 50 line that separates growth from contraction.

Some of the other details were similarly bullish, with sub-indexes for both new export orders and overall new orders swinging to gains, though the employment component of the report showed a faster decline than in the previous month.

The flash PMI represents some 85%-90% of the total responses to be used in the final report on Chinese factory activity.

While some economists have shrugged off a series of weak China data in recent months, some shrugged off Thursday's strong PMI reading.

In other markets;

Taiwan's Taiex Index hiked 107.21 points, or 1.2%, to 8,969.63

Singapore's Straits Times Index took on 3.38 points, or 0.1%, to 3,265.66

Korea's Kospi index regained 7.26 points, or 0.4%, to 2,015.59

New Zealand NZX 50 index regained 20.27 points, or 0.4%, to 5,128.84

Australia's S&P/ASX 200 prospered 55.37 points, or 1%, to 5,479.93


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Source: Baystreet Foreign Markets Wrap (Canada)


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