By Willa Plank
Signs that China's economy is stabilizing; weak earnings weigh on Nikkei
Asian markets were mixed Tuesday after the release of encouraging purchasing managers index data from China and ahead of policy news from the Reserve Bank of Australia and the Bank of Japan.
Hong Kong's Hang Seng Index was trading up 1.2% and the Shanghai Composite was up 0.4%. Both are getting a lift from the release of better-than-expected official manufacturing PMI data coming out of China.
The official manufacturing PMI rose to 51.2 in October from 50.4 in September, adding to signs that the world's second-largest economy is stabilizing. China's official non-manufacturing purchasing managers index, a measure of activity outside factory gates, edged up to 54.0 in October from 53.7 in September.
"It's really good ... generally it's very encouraging," said Margaret Yang, market analyst at CMC Markets, about the official manufacturing PMI data. "I think that it's going to provide support for industrial metals."
The Caixin manufacturing PMI for China was 51.2 in October, up from 50.1 in September.
Korea's Kospi was trading slightly up at 0.03% after the release of export data.
South Korea's exports shrank in October, crimped by the global recall of Samsung Electronics' (005930.SE) defective Galaxy Note 7 smartphone. But the pace of decline was slower than in the previous month. Exports declined 3.2% in October from a year earlier, largely in line with the median market forecast for a 3% drop. That followed a 5.9% fall in the previous month. Imports decreased 5.4% from a year earlier.
Analysts predict Korea's overseas shipments may gradually pick up, but will likely remain under pressure as the repercussions of the Samsung smartphone debacle drag into next year.
Japan's Nikkei was down slightly at 0.2%, weighed down by weak earnings news.
Electronics maker Panasonic (6752.TO) was down 7.4% after the company cut its profit forecast for the fiscal year ending in March, citing slower earnings from residential solar panels and information technology devices. Industrial robot maker Fanuc (6954.TO) was down 4.6% after Fanuc posted slower sales and profits for the half-year ended in September, citing weak sales of factory automation system in Asia excluding China and Europe and slower demand for auto production robots in the U.S. and Europe.
The Bank of Japan's policy meeting outcome was scheduled to be released later in the day, though traders were not expecting any major policy news.
"We expect no change in monetary policy from the BOJ, even though a downward revision to the BOJ inflation forecasts for [fiscal year 2017] is likely," wrote Société Générale in a note. "In Australia, we diverge from the consensus and look for another 25 basis point rate cut on the back of [a] weak labor market and soft inflation figures."
Looking ahead, the market was watching out for the U.S. ISM manufacturing PMI data coming out later tonight, U.S. jobs data scheduled to be released Friday and, of course, the U.S. presidential election next week.
(END) Dow Jones Newswires
October 31, 2016 23:10 ET (03:10 GMT)
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