Asia stocks track US higher despite weak China factory gauge

Asia-Pacific equities tracked Wall Street gains despite a weak reading for China’s manufacturing sector.

Domestic Chinese stocks rose with the CSI 300 of Shanghai and Shenzhen-listed companies up 0.7. That rise came as official figures showed growth in the country’s manufacturing sector slowed. China’s official manufacturing purchasing managers’ index came in at 50.2, short of estimates and pushing it nearer to the 50-point line separating expansion from contraction.

Julian Evans-Pritchard, senior China economist for Capital Economics said the private Caixin manufacturing PMI set to be released tomorrow will give a better guide to trends. “For now, the official PMIs suggest that while policy support is starting to have some effect, it has yet to fully offset the broader downward pressure on growth,” he said. “We think more fiscal and monetary loosening will be needed in the months ahead to help stabilise growth.”

Japan’s Topix climbed 1.2 per cent as technology stocks gained 2 per cent and industrials rose 1.7 per cent. The index remains on track for its worst one-month performance in more than six years, down 10.1 per cent. Data released on Wednesday showed Japanese industrial production fell more sharply than expected in September.

Meanwhile, in South Korea, industrial production fell 8.9 per cent year on year in September, the largest fall since 2009. The Kospi index was up 0.3 per cent.

The Hang Seng index in Hong Kong rose 0.9 per cent with technology segment gaining 2.3 percent. Despite the rise on Wednesday, the Hang Seng is on track for is poorest one-month performance since October 2015, falling 10.7 per cent.

Australia’s S&P/ASX 200 was up 0.4 per cent thanks to a boost from financials, which rose 0.9 per cent as major banks gained. Commonwealth Bank of Australia was up 1.3 per cent after the bank said it was selling its global asset management business to Japan’s Mitsubishi UFJ Trust and Banking corporation for $2.93bn.

On Wall Street overnight, the S&P 500 and Nasdaq Composite both gained 1.6 per cent.