Friday, February 1, 2013

Chinese Data Supports Asian Shares

Asian markets were mixed after mixed messages on Chinese manufacturing, though a series of broadly positive earnings reports boosted the Japanese market.

Two sets of data released early Friday measuring Chinese manufacturing activity pointed to different trends in the local factory sector.

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The official purchasing managers' index came in at 50.4 in January, slightly lower than December's 50.6 and below the 51.0 estimate from a Dow Jones poll of economists. A reading above 50 indicates an expansion in manufacturing activity.

The final reading on HSBC's purchasing managers' index�a survey that is more skewed toward smaller, private companies than the official reading�rose to a two-year high of 52.3 from a preliminary reading of 51.9, up from December's final reading of 51.5.

Chinese stocks started the day lower, initially reacting to the official number, before paring their losses after HSBC's reading was released.

Hong Kong's Hang Seng Index was down 0.4%, weighed by local Chinese companies. In mainland China, the Shanghai Composite was flat.

The Australian dollar fell to US$1.0393 from US$1.0442 before the data was released.

The manufacturing data is China's first economic release of the month, and will be followed by trade and inflation figures at the end of next week.

The other major economic data release due Friday will be U.S. nonfarm payrolls. The employment report will give investors a chance to check on the health of the world's largest economy, just days after the Federal Reserve completed its latest policy meeting, as well as releasing preliminary fourth quarter growth data that surprised on the downside.

The U.S. dollar was a touch higher against the yen on Friday after rising 0.7% overnight; the pair was recently at �91.91 compared with �91.71 late Thursday in New York. The greenback advanced 5.7% against its Japanese counterpart in January, a trend that has proved broadly supportive of stocks in Tokyo.

The Nikkei was up 0.6% after a large number of local companies reported on Thursday; the broadly positive news helped push shares higher.

Index heavyweight Softbank Corp. added 5.1% after posting strong third-quarter earnings, Japan Tobacco climbed 3.3% after raising its guidance for the fiscal year, while electronics company NEC Corp. jumped 7.6% after its third-quarter results beat expectations.

Investors were undecided about how to interpret Honda Motor's latest earnings report, with the company's stock up just 0.1%. On the positive side, the company reported a sharp rise in net profit for the October to December quarter; on the negative side, the company scaled back its full year earnings outlook.

Earnings results weren't all positive in Tokyo; cosmetics company Shiseido Co. lost 6.6% after reporting a third-quarter operating profit that undershot several forecasts.

In South Korea, the Kospi was down 0.3%, while the S&P/ASX 200 gained 0.8% in Australia.

Write to Daniel Inman at daniel.inman@wsj.com

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