Asia report: Stocks rise despite manufacturing disappointment
Most stock markets in Asia were in the green on Wednesday, even after Chinese factory activity data for November fell short of expectations.
In Japan, the Nikkei 225 was down 0.21% at 27,968.99, as the yen weakened 0.17% against the dollar to last trade at JPY 138.86.
Automation specialist Fanuc was down 0.46%, fashion firm Fast Retailing lost 0.8%, and technology conglomerate SoftBank Group slipped 0.12%.
The broader Topix index was off 0.37% by the end of trading in Tokyo, settling at 1,985.57.
Industrial production in Japan was down 2.6% year-on-year, according to data released earlier, well ahead of the 1.5% decline markets were expecting.
On the mainland, the Shanghai Composite eked out gains of 0.05% to 3,151.34, and the technology-heavy Shenzhen Component was 0.18% firmer at 11,108.50.
Fresh data out of Beijing showed a contraction in China’s industrial sector in November, with the official manufacturing purchasing managers’ index coming in at 48 for the month.
That was lower than the 49 reading pencilled in by analysts in a Reuters poll, and was down from the 49.2 print in October.
It was also still below the 50-point level that separates expansion from contraction.
“Large firms continued to outperform medium-sized and small firms,” said Duncan Wrigley at Pantheon Macroeconomics.
“But the large firm PMI was below 50 for the first time in four months, dropping to 49.1 from 50.1.
“The small firm PMI fell to 45.6, equal to the April level.”
Wrigley said the way ahead looked set to be messy as Chinese authorities searched for an acceptable zero-Covid policy exit path.
“This will include raising the vaccination rate among the over-80s from currently around 40% towards 80%, which will require time.
“The next few months are likely to be difficult, but we do expect meaningful progress in policy implementation and the economy over 2023.”
South Korea’s Kospi jumped 1.61% to 2,472.53, while the Hang Seng Index in Hong Kong surged 2.16% to 18,597.23.
Industrial production data was released for Korea as well, with a contraction of 3.5% reported, well below expectations for a 1% decline and making for the fastest fall since May 2020.
The blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 2.64% and SK Hynix rising 1.55%.
Oil prices were on the front foot at the end of the Asian day, with Brent crude futures last up 2.69% on ICE at $85.26 per barrel, and West Texas Intermediate ahead 2.51% on NYMEX at $80.16.
In Australia, the S&P/ASX 200 gained 0.43% to 7,284.20, after fresh data showed a slower rise in consumer inflation in October.
The Australian Bureau of Statistics said the consumer price index in the sunburnt country gained 6.9% year-on-year to the end of October, driven by housing, food and non-alcoholic drinks, and transport.
It was down from the 7.3% inflation print on September, and was in line with the 6.9% reading for August.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 added 1.38% to 11,552.04, led higher by software firm Gentrack Group, which leapt 19% for a second day of solid gains.
Gentrack shares jumped 18% on Tuesday, after the company lifted its earnings guidance by 45% to NZD 2.25 per share.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.59% at AUD 1.4865, and the Kiwi advancing 0.58% to NZD 1.6033.
Reporting by Josh White for Sharecast.com.