HONG KONG — Stocks indexes in Asia were mostly higher Tuesday after surveys showed China’s factory activity rose to a two-year high last month, suggesting the world’s No. 2 economy is stabilizing.
KEEPING SCORE: Hong Kong’s Hang Seng index jumped 1.2 percent to 23,205.85 and the Shanghai Composite index added 0.7 percent to 3,120.52. Japan’s Nikkei 225 edged 0.1 percent higher to 17,442.40, and India’s Sensez rose 0.3 percent to 28,020.86. South Korea’s Kospi slipped 0.1 percent to 2,006.06 and the S&P ASX/200 of Australia lost 0.5 percent to 5,290.50. Shares in Southeast Asia were mostly higher.
CHINA DATA: Caixin’s monthly purchasing managers’ index rose to 51.2 in October from 50.1 the previous month as production grew at its fastest pace in more than five years on strong domestic demand. A similar index by the official Chinese Federation of Logistics & Purchasing rose to 51.2 from 50.4 in September. Both are at their highest level since July 2014. They are based on 100-point scales on which the 50 mark separates expansion from contraction.
ANALYST VIEWPOINT: “This was also the strongest improvement in Chinese manufacturing conditions in two years. Much of the uplift came from domestic sources, as new export orders contracted marginally in October,” said Bernard Aw, an economist at IHS Markit. “The headline index suggested that government stimulus policies taken earlier may be starting to take effect in the manufacturing sector.”
U.S. TRADING: Market players are cautiously watching day-to-day developments of the U.S. presidential campaign, with just over a week to the election. The Dow Jones industrial average lost 0.1 percent to 18,142.42. The Standard & Poor’s 500 index was down less than 0.1 percent at 2,126.15 and the Nasdaq composite also lost less than 0.1 percent, to 5,189.13.
THIS WEEK: Also overhanging the markets are a Federal Reserve policy meeting and the October jobs report. Fed policymakers are not expected to raise interest rates so close to the election. However, investors are watching for comments on the economy. The jobs report Friday will be the last major piece of economic data out before the Nov. 8 election. It’s also a busy week for corporate earnings, with more than one-fifth of S&P 500 companies reporting their quarterly results.
JAPAN: The Bank of Japan wrapped up a two-day policy meeting without any changes to its minus 0.1 policy rate or other moves. The central bank did downgrade its inflation outlook, saying it expects to achieve a 1.5 percent inflation rate, rather than 1.7 percent, in the fiscal year that begins in April. The inflation rate now is about zero. Recent manufacturing data have shown a slight uptick in production that economists say could signal the stagnant economy is gaining strength.
ENERGY: U.S. benchmark oil futures gained 27 cents to $47.12 a barrel in electronic trading on the New York Mercantile Exchange. Overnight they extended their losses after falling last week to their lowest price this month. Crude fell $1.84 to $46.86 a barrel in New York. Brent crude, the international standard, rose 36 cents to $48.97 a barrel.
CURRENCIES: The U.S. dollar dipped to 104.78 yen from 104.87 yen a day earlier. The euro slipped to $1.0972 from $1.0973.
Tags: Asian stock markets, Bank of Japan, Brexit, China's PMI, China’s manufacturing, Chinese economic growth, Chinese manufacturing, Federal Reserve, FTSE 100, government stimulus, Hang Seng, Hong Kong, Interest Rates, Nikkei 225, oil futures gained, Shanghai Composite, U.S. presidential campaign