Asia report: Markets mixed as China manufacturing data goes both ways

Markets in Asia were in a mixed state on the first day of November, after a fresh pile of economic data from China painted a confused picture of the sector.

In Japan, the Nikkei 225 was up 2.61% at 29,647.08, as the yen weakened 0.26% against the dollar to last trade at JPY 114.25.

Of the major components on the benchmark index, automation specialist Fanuc was up 2.8%, fashion firm Fast Retailing added 4.22%, and technology conglomerate SoftBank Group was ahead 2.68%.

The broader Topix index was ahead 2.18% by the end of trading in Tokyo, closing at 2,044.72.

Voters headed to the polls in Japan on Sunday, returning the ruling Liberal Democratic Party to an overall majority in the lower house of the National Diet, albeit with 15 fewer seats at 261 out of 465.

That means Fumio Kishida will remain prime minister, having taken the reins from Yoshihide Suga at the start of October, who departed unexpectedly after barely a year in office.

On the mainland, the Shanghai Composite slipped 0.08% to 3,544.48, and the smaller, technology-heavy Shenzhen Composite rose 0.49% to 2,411.78.

China’s official purchasing managers’ index was released over the weekend, coming in at 49.2 for October, making for the second month in a row of contraction in the sector, after the September reading was 49.6.

A PMI reading above 50 indicates expansion, while below that marks shrinking.

Confusing the picture, however, was the unofficial Caixin/Markit manufacturing PMI for October, which came in at 50.6 on Monday, indicating expansion.

The Caixin survey tends to be more indicative of smaller and more private enterprises, while Beijing’s official data is skewed towards large, public and state-affiliated industry.

South Korea’s Kospi was up 0.28% at 2,978.94, while the Hang Seng Index in Hong Kong was 0.88% weaker at 25,154.32.

Technology plays were on the back foot in the special administrative region, with Alibaba Group down 2.15%, Meituan off 0.82%, and Tencent Holdings losing 2.37%.

Those moves came after Hong Kong’s market regulator published a set of planned rules for internet platforms on Friday, covering areas including data security and company governance.

The blue-chip tech stocks were in the green in Seoul, meanwhile, with Samsung Electronics up 0.14%, and SK Hynix jumping 3.4%.

“The week starts on quite a mixed sentiment in Asia,” said Swissquote senior analyst Ipek Ozkardeskaya.

“Japanese stocks rebounded in reaction to the LDP victory in keeping an outright majority in the lower house.

“The Nikkei rallied 2.5%, while Chinese equities remained under pressure as the official manufacturing PMI revealed a read below the 50 mark for the second month, pointing at an unpleasant slowdown in activity due to power shortages and rising commodity prices.”

Oil prices were higher at the end of the Asian day, with Brent crude last up 1.02% at $84.57 per barrel, and West Texas Intermediate ahead 0.6% at $84.07.

In Australia, the S&P/ASX 200 was up 0.64% at 7,370.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 0.52% to settle at 13,030.31.

The down under dollars were mixed against the greenback, with the Aussie last 0.18% weaker at AUD 1.3325, while the Kiwi advanced 0.17% to last trade at NZD 1.3934.