Asian Stocks Mixed After China Manufacturing Data Show Improvement

Asian stock markets were mixed Thursday after the official data showed that Chinese manufacturing activity expanded for the first time in three months.

Japan's benchmark Nikkei gained 0.14 percent or 12.59 points to 8,940.88, Hong Kong's Hang Seng gained 0.50 percent or 108.20 points to 21,750.02 and Chinese Shanghai Composite climbed 1.82 percent or 37.57 points to 2,106.45 while India’s BSE Sensex declined 0.25 percent and South Korea's KOSPI Composite plunged 0.73 percent.

Sentiment was improved after China's official and private sector manufacturing PMIs confirmed a recovering growth trend. The official data showed that China's manufacturing activity expanded in October after two months of contraction, suggesting that the world’s second-largest economy is reviving its growth momentum.

The data released by the China Federation of Logistics and Purchasing showed that the official Purchasing Managers' Index (PMI) gained to 50.2 in October from 49.8 in September. The index moved into the expansion zone, a reading above 50, first time since July. However, the reading was slightly below the economists’ estimate of 50.3.

"The return of PMI above 50 suggests economic momentum has indeed picked up. It indicates the effect of policy easing may have been stronger than the consensus expected," Reuters quoted Zhiwei Zhang of Nomura as commenting on the data.

Separately, a private sector survey also showed improvement in China’s manufacturing activity although the reading remained in contraction zone, reading below 50. The final reading of the HSBC Flash PMI, a measure of the nation-wide manufacturing, rose to 49.50 in October from 47.9 in September.

Japanese shares advanced but the upward move was limited as weaker-than-expected earnings from electronics major Panasonic Corp weighed on the tech sector. TDK Corp. plunged 5.84 percent and Sony Corp. plunged 4.09 percent while Panasonic Corp. tumbled 19.26 percent after the company sharply cut its earnings forecast for fiscal 2012.

Among the other stocks, Mazda Motor Corp. climbed 8.42 percent as the company swung to the second quarter net profit of 12.2 billion yen ($153.3 million) compared to a net loss of 14.4 billion yen in the same quarter last year. Softbank Corp. gained 3.96 percent after the company posted better-than-expected quarterly results.

Chinese shares rallied following the upbeat manufacturing data. Gemdale Corp. surged 3.65 percent and Huayuan Property Co Ltd. climbed 10.09 percent in Shanghai while Sands China Ltd. surged 3.43 percent in Hong Kong.

Seoul shares declined after data showed that South Korea’s manufacturing activity contracted at a slower rate in October compared to that in the previous month. The HSBC Purchasing Managers Index released Thursday rose to 47.4 in October compared to 45.7 in September. However, since the PMI is below 50, it indicates that the manufacturing is declining.

Hyundai Motor Co plunged 5.35 percent and Samsung Electronics Co Ltd. fell 1.37 percent while Kun Wha Pharmaceutical Co Ltd. tumbled 14.98 percent.