Asian Stocks Gain as Japan Rallies on Weaker Yen; China Drags

  • Investors waiting for U.S., EU data to assess economy: KGI
  • China stocks slide as latest PMI reading points to contraction

Emerging Stocks Face New Era

Asian equities kicked off June with an advance as Japanese stocks rallied on a weaker yen. Chipmakers boosted Taiwanese shares amid signs of stronger demand, while Chinese stocks retreated after manufacturing data signaled contraction.

The MSCI Asia Pacific Index gained 0.3 percent to 153.19 as of 4:06 p.m. in Hong Kong. The gauge for health companies jumped most as Santen Pharmaceutical Co. and Chugai Pharmaceutical Co. climbed more than 3.2 percent. Eight of 11 industry groups in the benchmark advanced while a measure of energy shares was the worst performer. 

Japan’s Topix gained 1.1 percent, the steepest advance in three weeks as the yen weakened for the first time in five days. The Shanghai Composite Index retreated after a private Chinese manufacturing purchasing managers index was weaker than expected and showed the lowest reading since June 2016, adding to recent evidence that the economy’s strong start to 2017 is leveling off. The government’s PMI reading on Wednesday showed manufacturing was steady last month.

“The overall market was supported by the rise in Japanese equities due to the weaker yen,” said Rakpong Chaisuparakul, an analyst at KGI Securities Thailand in Bangkok. “We have mixed China’s industry data, so right now I think many investors are waiting for more readings from Europe and U.S. later to assess the state of the global economy.”

U.S. employment data due later Thursday will allow investors to gauge the pace of future rate hikes, Rakpong said. Federal Reserve Bank of San Francisco President John Williams said at a press briefing in Seoul that the central bank may raise interest rate four times this year as the U.S. economy has been doing very well with the unemployment rate below 4.5 percent.

The Philippine Stock Exchange Index rose 1.2 percent, the most since May 8, as lawmakers consider changes to tax laws. Pakistan’s KSE100 Index was the worst performer in the region, falling after foreigners sold stocks on Wednesday, the day before it re-entered MSCI Inc.’s emerging-markets index.

Summary

  • Japan’s Topix +1.1%,
  • Taiwan Taiex +0.5%; Taiwan Semiconductor Manufacturing Co. +2%
  • Hong Kong Hang Seng Index +0.6%; HSCEI +0.2%; Shanghai Composite -0.5%
  • Singapore’s Straits Times Index +0.7%; Philippine Stock Exchange Index +1.2%; Vietnam’s VN Index +0.5%, Thailand’s SET Index little changed; FTSE Bursa Malaysia KLCI Index -0.3%
  • South Korea’s Kospi -0.1%; Samsung SDI -4.2% as Dongbu sees 2Q operating loss
  • Australia’s S&P/ASX +0.2%, New Zealand NZX +0.4%
  • India’s S&P BSE Sensex -0.1%, Pakistan’s KSE100 -4.2%
  • Indonesia’s markets are closed for a holiday
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