Asian Shares Rise On China PMI Report

 
on November 21 2012 11:27 PM

 

Asian shares rose Thursday as a survey showed China's manufacturing sector expanded for the first time in 13 months in November, adding to optimism after U.S. factory data that global growth may have turned a corner.

MSCI's broadest index of Asia-Pacific shares outside Japan extended early gains to rise 0.8 percent to a one-week high, Reuters reported.

Resources-sensitive Australian shares surged 1.3 percent to a one-week high as miners climbed. London copper rose 0.5 percent to $7,732.75 a ton while spot gold inched up 0.2 percent to $1,731.34 an ounce.

The China HSBC Flash Manufacturing Purchasing Managers Index rose to a 13-month high of 50.4 in November, indicating factory activity was picking up and pointing to reviving growth after seven consecutive quarters of slowing. A sub-index measuring output rose to 51.3, also the highest since October 2011.

"The data suggests China's growth had hit a bottom in the third quarter and prospects are brightening for small and medium-sized firms," Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory, told Reuters.

While the report is positive, the rise in prices of base metals, for which China is the world's top consumer, will be contained given the high level of Chinese inventories, he said.

"But shares get a boost because they are driven by sentiment and because contained base metal prices under an improving economy will help companies boost their earnings," Niimura said.

Japan's Nikkei stock average jumped 1.2 percent to a 6-1/2-month high as exporters were lifted by hopes the weakening yen would boost their earnings.

The opposition Liberal Democratic Party, which is tipped to win Dec. 6 elections, on Wednesday promised a big extra budget and a policy accord with the central bank on aggressive monetary stimulus to prevent the economy from sliding into recession.

The yen fell to a 7-1/2-month low versus the dollar of 82.59 on Thursday, while the yen also hit a 6-1/2-month low of 106.26 yen against the euro.

 

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