Asian markets rose Tuesday as investor confidence was lifted by the upward trend of the U.S. economy following improvement in the country’s manufacturing activity in September.
Japan's Nikkei Stock Average was up 0.19 percent or 16.96 points to 8813.47. Among the major gainers were Mitsui OSK Lines Ltd (6.70 percent), Ricoh Co Ltd (4 percent) and Toho Zinc Co Ltd (2.60 percent).
South Korea’s KOSPI Composite Index gained 0.34 percent or 6.81 points to 2003.02. Shares of Samsung Electronics Co Ltd rose 1.56 percent and those of LG Electronics Inc dropped 1.30 percent.
In China, Hong Kong and India, stock markets will remain closed Tuesday for holiday.
Market sentiment turned positive to note that the U.S. manufacturing activity improved in September alleviating concerns of the weakening of the world’s largest economy. According to data released Monday by the Institute of Supply Management (ISM), Manufacturing Purchasing Managers Index (PMI) rose to a four-month high of 51.5 in September from 49.6 in August.
The index climbed to the area of expansion since the reading is below 50. The improvement in the manufacturing activity would decrease fears of the likelihood of a sharp retardation in the economy.
Investors were encouraged to find that there was a rise in the employment index to 54.7 in September from 51.6 in August, suggesting the manufacturing activity improvement was already translating into faster jobs growth in the U.S.
Market participants hope that the rise in the U.S. manufacturing activity will be usher in a major and sustained improvement in economic growth in the country.
However, investor concerns about the global economy do persist. “The latest purchasing managers’ surveys suggests global manufacturing conditions improved a little in September relative to August. But they are still consistent on past form with very low global growth. What’s more, the prospects for a sustained acceleration in growth look poor,” Andrew Kenningham, an economist at Capital Economics, said.
Meanwhile, South Korea’s consumer price index rose 2.0 percent in September compared to the same month last year, up from 1.2 percent increase in August. Since it remains within the Bank of Korea’s target range of 2 to 4 percent, market players had expected a cut in the interest rate.