Asian shares mixed despite upbeat China factory data

Employees work on the floor of the Tokyo Stock Exchange in Tokyo, Thursday morning, Oct. 24, 2013. An improvement in China’s manufacturing wasn’t enough to boost Asian stock markets Thursday after Wall Street fell on disappointing corporate earnings. AP PHOTO/KOJI SASAHARA

HONG KONG—Asian shares were mixed on Thursday despite new data showing that China’s manufacturing activity hit a seven-month high in October, adding to evidence the world’s second-largest economy is recovering.

British bank HSBC’s preliminary purchasing managers’ index (PMI) for this month was 50.9, a significant improvement from September’s 50.2 and the highest since 51.6 in March.

Tokyo reversed earlier losses to finish up 0.42 percent, or 60.36 points, at 14,486.41, while Sydney gained 0.31 percent, or 16.8 points, to 5,372.9. Seoul climbed 0.54 percent, or 10.94 points, to 2,046.69.

However, Shanghai closed down 0.86 percent, or 18.79 points, at 2,164.32 and Hong Kong slid 0.71 percent, or 164.13 points, to 22,835.82.

“Investors may need more positive signals to confirm strength in economic growth,” Northeast Securities analyst Wang Guobing told Dow Jones Newswires.

The PMI tracks manufacturing activity in China’s factories and is a closely watched gauge of the health of the economy. A reading above 50 indicates growth, while anything below signals contraction.

The upbeat data from China followed “broad-based modest improvements” in the Chinese economy after last year’s slowdown, said Qu Hongbin, a HSBC economist in Hong Kong, in a statement accompanying the figures.

“This momentum is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms,” he said.

In the US, stocks ended lower Wednesday in a decline that analysts attributed to a mix of profit-taking and a couple of prominent earnings disappointments.

The Dow Jones Industrial Average dropped 0.35 percent, the broad-based S&P 500 slid 0.47 percent and the Nasdaq Composite Index declined 0.57 percent.

The losses came on the heels of a 10-day winning streak that saw the S&P 500 gain almost six percent.

“We had some disappointing earnings here in the US but I think it’s more a function of how much we’ve been up all across the board, a natural breather after a very strong rally,” said Alec Young, a global equity strategist at S&P Capital IQ.

Other analysts said weak earnings reports from Dow components Caterpillar and Broadcom exacerbated anxiety in the wake of the recent partial US government shutdown.

Caterpillar fell 6.1 percent after its latest quarterly earnings declined 44 percent and the company slashed its full-year forecast for the third straight quarter, while semiconductor firm Broadcom fell 2.9 percent after announcing it was cutting 1,150 jobs.

The dollar was changing hands at 97.47 yen in Thursday Tokyo afternoon trade, up from 97.32 in New York Wednesday afternoon.

In oil trade, New York’s main contract, West Texas Intermediate for delivery in December, was up 63 cents in the afternoon at $97.49. Brent North Sea crude for December gained 15 cents to $107.95.

Gold rose to $1,339.48 at 1030 GMT compared with $1,329.88 on Wednesday.

In other markets:

— Manila lost 0.77 percent, or 51.34 points, to 6,583.77.

Philippine Long Distance Telephone Co bucked the trend to rise 0.14 percent to 2,860 pesos while Ayala Corp. fell 0.89 percent to 611 pesos.

— Taipei rose 0.24 percent, or 20.1 points, to 8,413.72.

Hon Hai rose 0.66 percent to Tw$75.8 while TSMC was 0.9 percent lower at Tw$110.0.

— Wellington fell 0.85 percent, or 41.45 points, to 4,834.94.

Fletcher Building dropped 1.86 percent to NZ$9.48, Telecom Corp slid 0.85 percent to NZ$2.335 and Air New Zealand was steady on NZ$1.64.

— Jakarta ended up 1.06 percent, or 48.35 points, at 4,594.85.

Auto maker Astra International rose 3.73 percent to 6,950 rupiah, while lender Bank Permata fell 2.76 percent to 1,410 rupiah.

— Kuala Lumpur gained 0.27 percent, or 4.82 points, to 1,818.93.

CIMB Group Holdings rose 0.1 percent to 7.67 ringgit, while AirAsia fell 1.4 percent to 2.78 ringgit.

— Singapore closed up 0.41 percent, or 13.15 points, at 3,217.95.

Oil rig maker Keppel Corp. gained 0.92 percent to Sg$10.94 while United Overseas Bank was up 0.10 percent at Sg$20.82.

— Bangkok added 0.61 percent, or 8.96 points, to 1,466.32.

Supermarket operator Big C Supercenter lost 1.44 percent to 205 baht, while Siam Cement gained 1.85 percent to 440 baht.

— Mumbai fell 0.20 percent, or 42.45 points, to 20,725.43 points, retreating from a near three-year-high level of above 21,000 points.

IT outsourcer Wipro lost 4.25 percent to 471.30 rupees while the world’s largest coal miner Coal India retreated 3.25 percent to 279.65 rupees.