Asia shares mostly higher on upbeat China factory data

01-Feb-2019 Intellasia | AP | 6:00 AM Print This Post

Shares were mostly higher in Asia on Thursday after a survey of Chinese manufacturers showed factory activity improved slightly in December.

KEEPING SCORE: Germany’s DAX added 1.1 percent to 11,305.14 and the CAC 40 in France surged 0.8 percent to 5,013.60. Britain’s FTSE 100 jumped 0.7 percent to 6,988.16. Shares looked set for gains on Wall Street, with the future contract for the Dow Jones Industrial Average up 0.2 percent at 25,011.00 and that for the S&P 500 up almost 0.3 percent at 2,689.40.

THE DAY IN ASIA: Japan’s Nikkei 225 index gained 1.1 percent to 20,773.49 and the Hang Seng in Hong Kong climbed 1.1 percent, to 27,942.47. South Korea’s Kospi fell back after Samsung Electronics reported a near 30-percent drop in operating profit in the last quarter, losing 0.1 percent to 2,204.85. Australia’s S&P ASX 200 gave up 0.4 percent to 5,864.70. The Shanghai Composite index climbed 0.4 percent to 2,584.57 and India’s Sensex advanced 1.4 percent to 36,091.27. Shares were higher in Southeast Asia.

CHINA MANUFACTURING: An official measure of China’s manufacturing improved in January but forecasters say economic activity is sluggish as Chinese leaders try to resolve a tariff battle with Washington. The purchasing managers’ index issued Thursday by the government statistics agency and an industry group rose 0.1 points on a 100-point scale but stayed below a level that shows activity expanding. Measures for employment and domestic demand weakened. China’s economic growth sank to a three-decade low in 2018 after activity decelerated in the final quarter of the year.

US-CHINA TRADE: Trade talks opened Wednesday between the US and China and will loom over the market for the remainder of the week. The high-level talks are aimed at settling a months’ long trade war that has raised fears of slower economic growth. Industrial and technology companies have warned about slowing sales because of the trade impasse.

ANALYST’S VIEWPOINT: “Today what is most important is that we get day two of the two-day US-China trade talks. Let’s see who folds there. But with the Fed having delivered unto Trump what is Trump’s, and the Dow over 25,000, does he really need that easy deal, or can he let his team push back harder?” Michael Every, a senior strategist for the Asia-Pacific for Rabobank, said in a commentary.

SAMSUNG DISAPPOINTS: Samsung Electronics Co. said it posted a near-30 percent drop in operating profit for the last quarter after seeing slowing global demand for its memory chips and smartphones. It still finished the year with record earnings, but Samsung said it expects its overall annual earnings to decline this year because of the sluggish semiconductor market, although it sees its sales of memory chips and organic light-emitting diode panels used in mobile devices rebounding in the second half.

FED TALK: With pressures on the US economy rising a global slowdown, a trade war with China, a nervous stock market the Fed signaled it’s in no hurry to resume raising interest rates. And with inflation remaining tame, the rationale to tighten credit has become less compelling. “The situation calls for patience,” Chair Jerome Powell said at a news conference. “We have the luxury to be patient.”

ENERGY: US crude oil rose 26 cents in electronic trading on the New York Mercantile Exchange to $54.49 per barrel. It gained 1.7 percent to settle at $54.23 per barrel in New York on Wednesday. Brent crude, used to price international oils, added 40 cents to $61.94 per barrel. It had added 0.5 percent to close at $61.54 per barrel in London.

CURRENCIES: The dollar weakened to 108.76 yen from 109.04 yen on Tuesday. The euro rose against the dollar to $1.1495 from $1.1479.


Category: FinanceAsia

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