2012.05.02 11:51:50 Asian Shares End Higher On Upbeat US, China Manufacturing Data

By Sarah Turner in Sydney and Nick Godt in Mumbai Of DOW JONES NEWSWIRES MUMBAI (MarketWatch)--Asian stock markets ended higher Wednesday, as upbeat manufacturing data in the U.S. and China lifted investor sentiment, while a weaker yen supported Tokyo shares. Investors returning from a one-day break in Hong Kong pushed the Hang Seng Index up 1%, while the Shanghai Composite Index rose 1.8% as mainland Chinese bourses traded for the first time this week. "China and India continue to remain our favored markets, with positive signs out of the U.S. providing export upside to China, and any pessimism around the case for India already priced in," said Andrew Pease, Russell Investment's chief investment strategist for Asia-Pacific. Asian markets can push higher in 2012, he said. But the outlook is mixed given slower growth, earnings headwinds, valuations and scope for monetary policy easing. "The gains will be hard won," Pease said. Among other Asian stock markets back from a holiday Wednesday, South Korea's Kospi rose 0.9%. Japanese and Australian markets were the only major Asian bourses open Tuesday, and Wednesday's gains for both markets were less pronounced than elsewhere in the region. The Nikkei Stock Average rose 0.3%, while the Australian S&P/ASX 200 index rose 0.1%. While much of Europe was also closed for a holiday on Tuesday, the Dow Jones Industrial Average rose to hit its highest close since late 2007, a day after a report indicated U.S. manufacturing expanded in April. "The survey will ease concerns ... of a renewed slowdown in growth similar to the one seen last year. We think the latest recovery is made of sterner stuff," said Paul Dales, senior U.S. economist at Capital Economics. Investors were also eyeing an uptick in manufacturing data from China. Official data out Tuesday showed the Chinese manufacturing sector steadily improving in April, rising for a fifth straight month. On Wednesday, HSBC released its own manufacturing survey results for April, which also showed an improvement, although the index still remained in contraction territory. "The upward revision to April's final PMI reading, compared to the [preliminary] estimate, confirms that the pace of China's slowdown [has] stabilized," said Hongbin Qu, HSBC's chief economist for China. A range of firms were advancing in Hong Kong, with China Coal Energy up 1.4%, and China Shenhua Energy rising 0.3%. Apparel firm Esprit Holdings gained 2.4%, airline Cathay Pacific Airways rose 1.7%, and exporter and logistics firm Li & Fung advanced 2.2%. Also helping sentiment for Chinese stocks was news that the China Securities and Exchange Commission and the mainland stock markets would lower costs for stock transactions. Regulators also plan to tighten rules for initial public offerings and unqualified firms would be forced to delist, Citigroup analysts said. "This is likely part of the government's effort to lift the confidence level of investors in the [mainland Chinese] A-share markets ahead of the leadership reshuffle this fall," they said. "These moves, alongside accommodative macro policies, should attract capital flows back to China's equity markets. A rebound of the A-share markets could create positive spillover effects on the [Hong Kong] H-share market," the analysts said. The news sent brokers' shares higher in Shanghai, with Citic Securities up 1.3% and Haitong Securities up 2.3%. Meanwhile, Tokyo's market found some support after the improved U.S. manufacturing numbers helped to lift the greenback against the Japanese yen overnight, with the pair trading back above the Y80 mark. Japanese exporters pared some of the heavy losses posted the previous day, when a stronger yen worked to pull the Tokyo market down to its lowest close since mid February. Sony Corp. climbed 0.4%, Alps Electric Co. rose 1.2%, and Kyocera Corp. added 0.9%. Car stocks were also advancing, with Toyota Motor Co. up 0.5% after reporting a more-than-11% increase in April U.S. sales. Shares of Nissan Motor Co. were up 0.8%. Its own U.S. sales slipped 0.3% in April. Still, there were some post-earnings losses for the market to contend with, as Sharp Corp. dropped another 4.3% in Tokyo after losing ground earlier in the week in the wake of a record fiscal-year loss. Earnings-related losses also curbed performance in the Australian market, with Australia & New Zealand Banking Group Ltd. down 0.8% after reporting a 10% rise in first-half net profit that slightly undershot analyst expectations. Other banks yet to report included Westpac Banking Corp., which lost 0.6%; and Commonwealth Bank of Australia, trading down 0.3%. However, mining giant BHP Billiton Ltd. managed to gain 0.8% after a BHP executive stated that the firm's confident about the long-term outlook for commodity demand. -Dow Jones Newswires; +65 6415 4140; MarketTalk@dowjones.com TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAsia@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments. (END) Dow Jones Newswires May 02, 2012 05:51 ET (09:51 GMT)