Asian stocks take breather after last week’s surge

Pedestrians look at their mobile phones near an electronic stock board of a securities firm in Tokyo on Oct. 28, 2014. Asian markets were mixed Monday as traders took a breather after last week’s rally, but Shanghai hit a 21-month high on hopes of Chinese stimulus measures after a weak manufacturing report. AP PHOTO/EUGENE HOSHIKO

HONG KONG–Asian markets were mixed Monday as traders took a breather after last week’s rally, but Shanghai hit a 21-month high on hopes of Chinese stimulus measures after a weak manufacturing report.

Wall Street Friday had provided a healthy lead, with the Dow and S&P 500 reaching new highs after Japan’s central bank said it would ramp up its own stimulus program to kickstart growth.

The dollar held on to Friday’s gains against the yen, sitting at seven-year highs. Friday’s news came days after the US Federal Reserve ended its own stimulus.

Sydney eased 0.36 percent, or 19.7 points, to 5,506.9, while Seoul dropped 0.58 percent, or 11.46 points, to close at 1,952.97.

Hong Kong ended 0.34 percent lower, dipping 82.09 points to 23,915.97. But Shanghai closed 0.41 percent higher, adding 9.85 points to 2,430.03, its highest since February last year.

Tokyo was shut for a public holiday.

Global markets and the dollar surged on Friday after the Bank of Japan said it would widen its asset-purchasing scheme to boost lending and try to avoid a recession.

After a jump in Asian shares, including a near-five percent rise in Tokyo, Wall Street powered ahead.

The Dow leapt 1.13 percent and the S&P 500 added 1.17 percent–both hitting all-time highs–while the Nasdaq gained 1.41 percent.

However, dealers took a breather for the first day of November trade, with profit-takers moving in.

Dollar at seven-year highs

China at the weekend released an index of manufacturing activity that showed growth slowed in October, the latest data indicating the world’s second-largest economy slowing down.

The official purchasing managers’ index (PMI) came in at 50.8 last month, the National Bureau of Statistics said, lower than 51.1 in September. Readings above 50 indicate growth while anything below points to contraction.

PMI tracks activity in China’s factories and workshops and is a closely watched indicator of the health of the economy.

On Monday a separate report by HSBC came in a 50.4, the strongest result since July.

“Overall, the manufacturing sector continued to stabilize in October; however, the sequential momentum likely weakened,” said HSBC. “The economy still shows clear signs of insufficient effective demand.”

The figures have raised hopes that Beijing will introduce new economy-boosting measures, with some analysts suggesting officials will cut the amount of cash banks must keep in reserve in order to boosting lending.

“More new infrastructure projects and continuous monetary easing might improve manufacturing for the coming months,” Haitong Securities said, according to Dow Jones Newswires.

On currency markets the dollar bought 112.76 yen–its highest since December 2007–against 112.25 yen Friday in New York.

The euro was at $1.2489 and 140.85 yen compared with $1.2525 and 140.71 yen.

Oil prices were mixed. US benchmark West Texas Intermediate for December delivery fell 39 cents to $80.15, while Brent crude was down 53 cents at $85.33.

The price of gold fell to $1,172.85 an ounce from $1,173.87 late Friday.

In other markets:

— Taipei rose 0.34 percent, or 30.10 points, to 9,004.86.

Taiwan Semiconductor Manufacturing Co. closed 0.38 percent higher at Tw$131.0, while Hon Hai Precision Industry gained 2.19 percent to Tw$98.1.

— Wellington climbed 0.56 percent, or 30.39 points, to 5,418.22.

Genesis Energy surged 2.99 percent to NZ$2.07 and Air New Zealand was steady at NZ$2.01.

— Manila ended 1.35 percent higher, adding 97.12 points to 7,312.85.

GT Capital Holdings gained 1.39 percent to 1,024 pesos while Philippine Long Distance Telephone rose 4.42 percent to 3,262 pesos.

— Jakarta closed flat, edging down 4.04 points to 5,085.51.

Carmaker Astra International rose 1.48 percent to 6,875 rupiah, while state miner Aneka Tambang lost 2.58 percent to 945 rupiah.

— Kuala Lumpur ended flat at 1,853.34.

Public Bank shed 0.3 percent to 18.48 ringgit, while budget carrier AirAsia gained 2.4 percent to 2.56 ringgit.

— Singapore closed 0.51 percent, or 16.59 points, higher at 3,290.84.

DBS Bank advanced 1.84 percent to end at Sg$18.82 and Singapore Telecom added 0.53 percent to finish at Sg$3.80.

— Bangkok closed down 0.31 percent, or 4.98 points, to 1,579.18.

Coal producer Banpu dropped 2.65 percent to 27.50 baht, while supermarket operator Big C Supercenter gained 3.43 percent to 241 baht.

— Mumbai ended little changed at 27,860.38.

Gail India fell 5.70 percent to 499.00 rupees, while Sesa Sterlite gained 2.17 percent to 261.30 rupees.