Asia Stocks Higher As China Factory Output Grows
By PAMELA SAMPSON
BANGKOK (AP) â¿¿ Asian stock markets swung higher Friday after a survey showed an improvement in China's manufacturing, offsetting gloom from a sharp drop in Japanese business confidence.
HSBC Corp. said its preliminary Purchasing Managers' Index for December rose to 50.9, a 14-month high and up from November's reading of 50.5. Numbers above 50 represent an expansion of manufacturing.
"I think it adds further encouragement that China is moving in the right direction," said Andrew Sullivan, a self-employed analyst based in Hong Kong. "But we are also seeing a lot of money sitting on the sidelines at the end of the year, and people want to get it invested. In previous years, we've seen good rallies around the end of the year."The preliminary version of the HSBC index is based on responses from 75 to 80 percent of the 420 companies surveyed each month. The full report is due out at the end of the month. Hong Kong's Hang Seng pulled out of negative territory to advance 0.6 percent to 22,579.2 by midday. Mainland Chinese shares posted sharp gains, with the Shanghai Composite Index surging 2.9 percent to 2,120.84. The smaller Shenzhen Composite Index shot up 2.9 percent as well, to 806.67. Japan's Nikkei 225 index erased morning losses that followed the release of a Bank of Japan survey which showed large Japanese manufacturers are more pessimistic about business conditions. The "tankan" index for the December quarter dropped from September's minus three to minus 12, much worse than expected. The benchmark in Tokyo posted a 0.2 percent gain to 9,760.32, a day after closing at an eight-month high. A weakening yen helped export shares, with Japan's Fujitsu Ltd. surging 6.2 percent and Sharp Corp. jumping 3.2 percent. South Korea's Kospi fell 0.3 percent to 1,997.38. Benchmarks in India, Indonesia and Taiwan also fell. Australia's S&P/ASX added less than 0.1 percent to 4,585.90.
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