Asia report: Most markets rise as China manufacturing data surprises

Most markets in Asia closed the first day of December in positive territory, as fresh data out of China showed a stronger-than-anticipated month for factory activity in November.

In Japan, the Nikkei 225 was up 1.01% at 23,529.50, as the yen weakened 0.05% against the dollar to last trade at JPY 109.54.

Technology conglomerate SoftBank Group finished the day down 0.4%, while among the other major components on the benchmark index, Fanuc was up 1.6% and Fast Retailing rose 1.66%.

The broader Topix index was 0.89% heavier in Tokyo, finishing off its trading session at 1,714.49.

On the mainland, the Shanghai Composite was 0.13% firmer at 2,875.81, and the technology-saturated Shenzhen Composite was up 0.22% at 1,596.60.

Investor attention in China was on the release of manufacturing data for November, with the unofficial Caixin/Markit purchasing managers’ index coming in at 51.8 for the month - remaining above the 50 point level that separates expansion from contraction.

That was ahead of expectations for a reading of 51.4 from economists polled by Reuters, and a marginal rise from the 51.7 figure in October.

The private data came after Beijing’s official purchasing managers’ index was reported as 50.2 for November, which was also higher than anticipated by Reuters-polled economists, who had picked a shrinking sector at 49.5.

It was also a swing back to growth for the official data, which was 49.3 for October.

“Seasonal factors could be boosting the November number, after the holiday the previous month, though our adjustment model suggests the positive effect was mild,” said analysts at Pantheon Macroeconomics.

“Gains were driven by output, with the import subindex also rising strongly in an encouraging sign for exporting nations, though it remains below 50.

“New orders continue to point up but we don’t trust the lead.”

South Korea’s Kospi added 0.19% to close at 2,091.92, while the Hang Seng Index in Hong Kong was ahead 0.37% at 26,444.72.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics up 0.2%, while chipmaker SK Hynix fell 0.49%.

On the US-China trade front, a report from United States-based political news website Axios on Sunday said that an expected first-phase trade deal between the two economic superpowers was now on the rocks due to recent legislation passed in Washington in support of pro-democracy protestors in Hong Kong.

The report suggested the anticipated deal, which investors had hopes would be tied up before a 15 December deadline for new tariffs on Chinese imports to the US, would now only happen at the end of the year “at the earliest”.

It did also say, however, that US president Donald Trump was prepared to hit pause on those planned mid-December tariffs.

Across the Pacific, Chinese state media reported over the weekend that Beijing was keen to see a rollback on existing tariffs as part of that first phase deal, in a bid to undo the damage of the tit-for-tat war of punitive import charges that has been waged for more than a year.

Oil prices were higher at the end of the Asian day, with Brent crude last up 2.36% at $61.95 per barrel, and West Texas Intermediate adding 2.44% to $56.55.

In Australia, the S&P/ASX 200 ended its session 0.24% higher, at 6,862.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was the odd one out in the region, falling 0.1% to close at 10,946.30.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.34% at AUD 1.4737, and the Kiwi advancing 0.83% to NZD 1.5447.