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Asia shares boosted by China PMI data

Asian shares mostly rose Thursday as data indicated an improvement in Chinese manufacturing activity and minutes from the US Federal Reserve showed officials are considering their policy options after the bank's stimulus programme ends.

HONG KONG: Asian shares mostly rose Thursday as data indicated an improvement in Chinese manufacturing activity and minutes from the US Federal Reserve showed officials are considering their policy options after the bank's stimulus programme ends.

Wall Street provided a healthy lead, with all three main indexes well up, while the dollar added to its gains in New York as traders become more confident in higher-yielding, riskier assets.

Tokyo rallied 2.11 per cent, or 295.62 points, to 14,337.79, Sydney jumped 1.02 per cent, or 55.33 points, to 5479.9 and Seoul gained 0.36 per cent, or 7.26 points, to 2,015.59.

Hong Kong rose 0.51 per cent, or 117.24 points, to 22,953.76 but Shanghai closed 0.18 per cent lower, giving up 0.18 per cent, or 3.66 points, to end at 2,021.29.

HSBC said preliminary data from its purchasing managers index (PMI) showed activity in China's factories declining at a much slower pace in May than in April.

The banking giant's PMI improved to 49.7 from 48.1 last month.

While the figure is below the 50-mark -- suggesting contraction -- it is the second straight month of improvement and will fuel hopes that the world's number two economy is picking up.

"The improvement was broad-based with both new orders and new export orders back in expansionary territory," Qu Hongbin, HSBC's Hong Kong-based economist, said in the statement.

"Some tentative signs of stabilisation are emerging, partly as a result of the recent mini-stimulus measures and lower borrowing costs."

But he added that "downside risks to growth remain, particularly as the property market continues to cool".

In the United States, minutes from the Fed's April committee meeting showed policymakers are discussing how to manage the impact of an interest rate hike they expect to implement in the middle of next year.

Their talks come as the bank winds down its massive stimulus programme amid growing signs that the US economy is getting back on track after the financial crisis.

"The committee's discussion of this topic was undertaken as part of prudent planning and did not imply that normalisation would necessarily begin sometime soon," the minutes said.

"Because the Federal Reserve has not previously tightened the stance of policy while holding a large balance sheet, most participants judged that the committee should consider a range of options and be prepared to adjust the mix of its policy tools as warranted."

US rates have been at a record low since December 2008, part of the bank's unprecedented loose monetary policy aimed at helping the economy recover from the global recession.

On Wall Street the Dow rallied 0.97 per cent, the S&P 500 jumped 0.81 per cent and the Nasdaq rose 0.85 per cent.

And in currency trade the greenback bought 101.60 yen in the afternoon, up from 101.38 yen late in New York and much higher than the 101.17 yen in Tokyo earlier Wednesday.

The euro bought $1.3678 and 138.92 yen against $1.3686 and 138.76 yen in US trade.

Oil prices dropped after rallying late Wednesday on news that US stockpiles had plummeted, lifting hopes that demand is picking up.

US benchmark West Texas Intermediate for delivery in July eased seven cents to $104.00 in afternoon trade, after jumping $1.74 to close at a one-month high Wednesday.

Brent North Sea crude for July was down 13 cents at $110.41. The contract gained 86 cents in London, touching a level last seen in early March.

Gold fetched $1,296.27 an ounce at 1050 GMT compared with $1,292.14 late Wednesday.

In other markets:

-- Bangkok closed up 0.16 per cent or 2.29 points to close 1,405.21

Coal producer Banpu lost 2.50 per cent or 0.75 baht and energy gaint PTT Plc dropped 0.65 per cent or 2.00 baht to 308.00 baht.

-- Jakarta ended up 1.21 per cent, or 59.59 points, at 4,969.88.

State miner Aneka Tambang gained 5.04 per cent to 1,250 rupiah, while cement maker Semen Indonesia fell 0.17 per cent to 14,950 rupiah.

-- Kuala Lumpur's main stock index lost 1.91 points or 0.10 per cent to close at 1,875.12.

Plantation giant Sime Darby fell 0.1 per cent to 9.64 ringgit, while utility Tenaga Nasional shed 0.2 per cent to 12.18. Budget carrier AirAsia gained 4.5 per cent to 2.56 ringgit.

-- Singapore rose 0.12 per cent, or 3.88 points, to close at 3,265.66.

Property developer CapitaLand was up 1.27 per cent to S$3.18 and Singapore Airlines dipped 0.19 per cent to S$10.28.

-- Mumbai's benchmark index rose 0.31 per cent or 76.38 points to 24,374.00 points.

Shares of the scandal tainted Multi-Commodity Exchage of India, which is listed on BSE, rose 19.91 per cent to 586.40 rupees while Suzlon Energy surged 14.88 per cent to 21.93 rupees.

-- Taipei climbed 1.21 per cent, or 107.21 points, to 8,969.63.

Taiwan Semiconductor Manufacturing Co rose 1.24 per cent to Tw$122.0 while smartphone maker HTC was 0.62 per cent higher at Tw$163.5.

-- Wellington rose 0.40 per cent, or 20.27 points, to 5,108.57.

Air New Zealand was 1.64 per cent higher at NZ$2.17 and Contact Energy added 0.18 per cent to N$5.46.

-- Manila rose 1.01 per cent, or 68.20 points, to close at 6,830.56.

Philippine Long Distance Telephone added 0.55 per cent to 2,900 and Ayala put on 1.32 per cent to 654 pesos.

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