Asian shares gain as China markets re-open to upbeat HSBC flash PMI

Investing.com - Tokyo clocked up more gains before the mid-day break Wednesday as Asian shares gained overall with China markets back open and better than expected HSBC China flash manufacturing estimates for February.

The Nikkei 225 rose 0.14% while the Shanghai Composite gained 0.13% and the Hang Seng was up 0.32%.

The HSBC China February flash manufacturing PMI jumped to 50.1, well above the expected drop to 49.5 and up from January's final 49.7.

"Domestic demand firmed while new export orders contracted for the first time since April 2014. Both input and output prices remain in contraction," said Qu Hongbin, Chief Economist, China and joint head of Asian economic research at HSBC.

"Today's data point to a marginal improvement in the Chinese manufacturing sector going into the Chinese New Year period in February. However, domestic economic activity is likely to remain sluggish and external demand looks uncertain. We believe more policy easing is still warranted at the current stage to support growth."

Overnight, U.S. stocks were higher after the close on Tuesday, as gains in the Utilities, Telecommunications and Basic Materials sectors led shares higher.

At the close in New York, the Dow Jones Industrial Average rose 0.51% to hit a new all time high, while the S&P 500 index climbed 0.28%, and the NASDAQ Composite index climbed 0.14%.

Overnight, markets were supported after Federal Reserve Chair Janet Yellen sounded more hawkish than expected in her prepared remarks to the Senate Banking Committee.

In prepared remarks released before her testimony to the Senate Banking Committee, Fed Chair Yellen said that the central bank will change its forward guidance in an effort to increase the Fed's flexibility and mute any potential market reaction before beginning to hike rates.

According to Yellen, the central bank will first drop the word "patient" from its statement. However, that does not mean that a rate hike will automatically follow in a couple of meetings.

Market players had previously thought dropping the "patient" reference meant that the Fed will start raising rates in a couple of meetings.

Instead, the Fed will consider interest rate hikes "on a meeting by meeting basis," if economic conditions continue to improve, as the Committee anticipates.