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Most Asian Stocks Advance as Investors Weigh China PMI

Most Asian stocks rose, after the regional benchmark index capped its first monthly drop since April, as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth.

The MSCI Asia Pacific Index added 0.2 percent to 148.20 as of 4:08 p.m. in Hong Kong, with three shares advancing for every two that fell. The gauge dropped 0.6 percent in August. European Union governments agreed to impose new sanctions on Russia if the Ukraine conflict worsens. China manufacturing gauges missed estimates, suggesting Asia’s biggest economy is losing momentum.

“The market seems to be treating bad news as good news,” Nader Naeimi, who helps oversee about $131 billion as Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd. “China may introduce more stimulus as economic data weakens. What’s happening in Ukraine is unfortunate but the damage to the global economy will likely be minimal.”

China’s Purchasing Managers’ Index was at 51.1 for August, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing, missing the median 51.2 estimate in a Bloomberg News survey and compared with 51.7 in July. The final reading of a private gauge of factory activity from HSBC Holdings Plc and Markit Economics came in at 50.2, versus the 50.3 predicted by economists. Readings above 50 indicate expansion.

India’s S&P BSE Sensex index, Taiwan’s Taiex index and China’s Shanghai Composite Index climbed 0.8 percent. Hong Kong’s Hang Seng Index closed little changed. Australia’s S&P/ASX 200 Index added 0.1 percent. Japan’s Topix index gained 0.4 percent.

New Zealand’s NZX 50 Index lost 0.2 percent. South Korea’s Kospi index was little changed. Singapore’s Straits Times Index slipped 0.4 percent. Malaysian markets are closed for a holiday.

Samsung Merger

Samsung Heavy Industries Co. and Samsung Engineering Co. each gained at least 6.2 percent after saying they’ll combine by the end of the year. Hitachi Zosen Corp. (7004) jumped 13 percent after Mizuho Securities Co. raised its rating on the maker of garbage incinerators. Sands China Ltd. fell 3.2 percent after Macau’s casino revenue dropped a third straight month in August and was worse than analysts estimated.

Pro-Russian rebels attacked two Ukrainian coast-guard vessels for the first time, just hours after the EU agreed to impose new sanctions if the conflict escalates. The EU gave the European Commission a week to deliver proposals that may target Russia’s energy and finance industries.

Connect Test

Brokerages in Hong Kong and Shanghai said the first full trial of the cities’ stock-exchange link went smoothly over the weekend, supporting plans to go live in October with a program giving foreigners unprecedented access to mainland stocks. The discount on mainland shares compared with Hong Kong narrowed.

Protest leaders in Hong Kong vowed to start an era of civil disobedience that may bring chaos to one of the world’s financial capitals after they accused China of betraying its promise to deliver greater democracy.

China, which seven years ago promised Hong Kong a form of universal suffrage for the 2017 leadership election, instead approved a plan that would require candidates to be screened by a 1,200-member committee before voters get to cast their ballots. The activist group Occupy Central With Love and Peace said the time for negotiation had passed and it will carry out its threat to stage a mass occupation of Hong Kong’s financial district, without specifying a date.

Samsung Heavy, the world’s third-largest maker of ships, climbed 6.2 percent to 28,950 won in Seoul after saying it will combine with Samsung Engineering in a deal valued about 2.5 trillion won ($2.5 billion). The latter company jumped 13 percent to 71,900 won.

Dongfeng Profit

Dongfeng Motor Group Co., the partner of PSA Peugeot Citroen in China, gained 1.4 percent to HK$14.56 in Hong Kong. First-half net income increased to 8.51 billion yuan ($1.39 billion) from 5.54 billion yuan a year ago.

Hitachi Zosen soared 13 percent to 574 yen in Tokyo, the biggest rally since March 2013. Mizuho raised its rating on the stock to buy from neutral, saying strong orders will boost operating-profit growth.

Among shares that fell, Nisshin Steel Co. (5413) dropped 5 percent to 1,051 yen after the company announced plans to raise up to 10.8 billion yen ($104 million) selling treasury shares.

Casino operators slipped after official data showed total gross gaming revenue in Macau dropped 6.1 percent to 28.9 billion patacas ($3.6 billion) in August from a year earlier. The median estimate among seven analysts surveyed by Bloomberg News was for a 2 percent decline. Sands China slid 3.2 percent to HK$48.90. Wynn Macau Ltd. fell 2.4 percent to HK$29. Galaxy Entertainment Group Ltd. sank 2.9 percent to HK$56.70.

Futures on the Standard & Poor’s 500 Index lost 0.1 percent today. The U.S. equity benchmark rose 0.3 percent to a fresh record Aug. 29 amid optimism in the strength of the economy. The nation’s financial markets are closed today for a holiday.

The MSCI Asia Pacific Index (MXAP) traded at 13.7 times estimated earnings at the last close, compared with 16.8 for the S&P 500 and 15.4 on the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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