Asian Stocks Rise on China Data as Topix Ekes Out Gain After BOJ

  • Caixin China PMI rises to 51.2 versus 50.1 in survey
  • Bank of Japan concludes its two-day meeting on Tuesday

Breaking Down China's October PMI Data

Asian stocks climbed for a second day as gauges of manufacturing in China topped estimates and Tokyo equities edged higher after the Bank of Japan maintained its record stimulus program.

The MSCI Asia Pacific Index added 0.3 percent to 139.42 as of 4:10 p.m. in Hong Kong, led by utilities and energy shares. A government and a private gauge of China manufacturing indicated a stabilization in Asia’s largest economy. The Topix index reversed losses as the BOJ kept its monetary policy stance unchanged even as it trimmed its forecast for inflation for the coming fiscal year. The Reserve Bank of Australia left the cash rate at 1.5 percent.

China’s official factory gauge rose to the highest since July 2014 in October, suggesting the economy maintained a steady expansion into the fourth quarter as robust consumption underpins demand.

“This will improve market sentiment,” said Margaret Yang, a Singapore-based analyst at CMC Markets Singapore. The data “indicates the economy has swung back into expansionary territory for a third consecutive month and shows further stabilization of Asia’s largest economy.”

Central bank decisions, including from the Federal Reserve this week, and next week’s U.S. presidential election are some of the major events investors need to grapple with in addition to a raft of company earnings results. Odds of an interest-rate hike in the U.S. this week are well below 20 percent, while traders now see a 71 percent probability of an increase next month, though an indecisive U.S. vote or further appreciation in the dollar might jeopardize such a move.

Hong Kong’s Hang Seng Index rose 0.9 percent and the Hang Seng China Enterprises Index for mainland Chinese companies listed in Hong Kong jumped 1.5 percent. The Shanghai Composite Index gained 0.7 percent.

Japan Shares

Japan’s Topix index climbed less than 0.1 percent. The measure posted a 5.3 percent gain in October, the best month since July, as the yen slid against the dollar. A weaker currency has fanned bets exporters’ profits may not be as bad as previously expected for the year.

Earnings were also in focus, with Kyushu Electric Power Co. jumping after net income forecasts beat estimates, while Fanuc Corp. weighed on the Topix the most after its operating profit guidance was worse than expected. Among the 235 Japanese companies that reported earnings Monday, Honda Motor Co. raised its forecast for full-year profit.

Australia’s S&P/ASX 200 Index slipped 0.5 percent with trading volume down about 29 percent on its 30-day average. Melbourne residents enjoyed a public holiday and Sydney traders’ eyes were glued to TVs in bars across the city to watch the Melbourne Cup horse race.

South Korea’s Kospi index was little changed, Taiwan’s Taiex index slipped 0.2 percent and New Zealand’s S&P/NZX 50 Index was down 0.4 percent. Markets in the Philippines remained closed for a holiday.

E-mini futures on the S&P 500 index gained 0.3 percent after the underlying gauge of U.S. shares closed little changed on Monday.

    Before it's here, it's on the Bloomberg Terminal.