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Shares in Asia gain on manufacturing views, with China markets shut

Published 09/30/2015, 11:55 PM
Updated 09/30/2015, 11:56 PM
© Reuters.  Asian shares up with China markets shut

Investing.com - Asian shares gained on Thursday in trimmed dealings with China shut, but a slew of manufacturing data that was mixed still set a hopeful tone.

The S&P/ASX 200 rose 1.63%, while the Nikkei 225 jumped 2.19%.

Today, China starts a week-long holiday to mark the country's National Day, but surveys on manufacturing and services were released.

The official CFLP manufacturing PMI improved slightly to 49.8 in September, and beat an expectation of 49.6, as it inched toward expansion territory above 50 thanks to strong gains in new orders and production.

The Caixin manufacturing PMI for September came in as expected at 47.2 and above the flash manufacturing PMI reading of 47.0, the lowest since March 2009.

The Caixin Services index came in at 50.5, compared to 51.5 in August.

The Bank of Japan's quarterly Tankan survey showed the large manufacturing index in the latest quarter at +12, from +15 in June and a +13 expected.

The figures show that a further Chinese slowdown and unstable stock markets are making many manufacturers more cautious.

Backed by record profits, companies have high capital investment plans but they are putting some of them on hold until prospects improve, likely leading the BoJ to maintain the pace of its asset purchases at its two-day policy meeting on Oct. 6-7 in the absence of a major external shock that could threaten the path to stable 2% inflation.

But at its Oct. 30 meeting, the BoJ board is likely to lower its median GDP and CPI forecasts for fiscal 2015 as exports, spending and capex remain weak.

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In Australia, the AI Group manufacturing index rose 0.4 point to 52.1, the third straight monthly gain.

Federal Reserve chair Janet Yellen on Wednesday afternoon steered clear of new comments on rates.

Yellen on Wednesday pointed to the "significant improvement" the economy has made in recent years as she spoke Wednesday about the challenges facing the nation's community banks.

Yellen avoided further comments on the economy or on monetary policy less than a week after she said the Fed had moved far enough toward achieving its employment and inflation goals that an initial hike in the federal funds rate is likely "sometime later this year."

Overnight, U.S. stocks rose broadly on Wednesday to erase some of their massive losses from Tuesday's sell-off, but the major indices ended the month with one of its worst quarters since 2011, weighed down by fears of a potential deflation in China and an imminent interest rate hike by the Federal Reserve.

The Dow Jones Industrial Average and the NASDAQ Composite index each dropped by more than 6% on the quarter, while the S&P 500 Composite index also fell sharply, amid mounting concerns of overvaluation among U.S. equities. Earlier this year, all three major indices surged to all-time record highs.

On Wednesday morning, payroll processing firm ADP said U.S. non-farm private employment rose by 200,000 in September, above analysts' expectations of a 190,000 gain. The reading provides a harbinger for a strong jobs figure on Friday when the U.S. Department of Labor releases its September national employment report.

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The Dow gained 235.57 or 1.47% to 16,284.70 in Wednesday's session, while the NASDAQ added 102.85 or 2.28% to close at 4,620.17. The S&P 500, meanwhile, rose 35.94 or 1.91% to 1,920.03, as all 10 sectors closed in the green. Stocks in the Health Care, Technology and Energy sectors led, each gaining more than 2.25% on the day.

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