Bloomberg News
Asian stocks rose from a four-month low and copper climbed with Australia's dollar as a preliminary gauge of Chinese manufacturing unexpectedly rose. The price of insuring Asian bonds against default increased with precious metals.
The MSCI Asia Pacific excluding Japan Index climbed 0.2 percent by 12:50 p.m. in Hong Kong, reversing a drop of as much as 0.3 percent. Copper climbed 0.7 percent after a gauge of commodities closed at the lowest since July 2009 yesterday. Australian bonds rallied while the local dollar strengthened 0.5 percent from a seven-month low. A gauge of Asian credit-default swap prices climbed two basis points. Standard & Poor's 500 Index futures were little changed after the U.S. gauge slid 0.8 percent. Palladium added 0.6 percent.
The so-called flash purchasing managers index rose to 50.5 from a reading of 50.2 in August, HSBC Holdings Plc and Markit Economics said, while economists predicted it would fall to 50, the border between expansion and contraction. About $574 billion was wiped from the value of global equities yesterday after China's Finance Minister Lou Jiwei damped speculation leaders in Asia's biggest economy will implement large-scale stimulus. Factory indexes for the U.S. and Europe are also scheduled.
'There's cyclical weakness in stocks, stemming from lower commodity prices to the propensity for a mild recession in Europe,' said Raymond Tang, who oversees about $15 billion in Kuala Lumpur as chief investment officer at CIMB-Principal Asset Management Bhd. 'There are always concerns about China's economy and credit risks, whether it's just worries or something that will break the camel's back. So far, they've been well managed.'
Asian Index
About three stocks fell for every two that rose today on the Asian equity gauge that excludes Japan, where markets are closed for a holiday.
The Hang Seng Index, which has advanced on just four out of 15 trading days this month through yesterday, swung between gains and losses. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong added 0.3 percent after closing at a two-month low yesterday. The Shanghai Composite Index advanced 0.7 percent.
The manufacturing data is 'a really encouraging figure, but it does not suppress concerns over China because we have seen a broad-based decline in most indicators,' said Desmond Chua, a strategist at CMC Markets in Singapore. 'We're seeing this knee-jerk rebound in the Aussie dollar. That shouldn't be surprising, given that there was a lot of priced-in expectations for the manufacturing PMI to come in much weaker.'
Aussie Rally
The Australian dollar, known as the Aussie, climbed to 89.12 U.S. cents after slipping to as low as 88.53 cents last session, its weakest level since Feb. 4. The S&P/ASX 200 Index swung to a 0.4 percent gain. Canada's dollar added 0.2 percent.
Australian government notes due in a decade climbed, with the yield sliding eight basis points, or 0.08 percentage point, to 3.57 percent. The rate tumbled seven basis points yesterday. U.S. yields fell for a third day yesterday, the longest streak this month.
The Markit iTraxx Australia index of credit-default swap prices climbed three basis points to 82.75 basis points as of 10:49 a.m. in Sydney, Westpac Banking Corp. prices show. The gauge is set for its biggest one-day gain since May 16 and its highest close in almost a month, according to data from CMA.
'Slow Grind'
The Markit iTraxx Asia index increased 2 basis points to 95 basis points as of 8:40am in Singapore, according to RBS prices. The measure is poised to advance for a second consecutive day and its highest close in a week.
'Credit seems to be on a slow grind downward,' said Tse Chern Chia, head of Asia fixed income at UOB Asset Management in Singapore. 'This is periodic weakness that we see. People are worried about interest rates rising and global growth slowing. But the China PMI was satisfactory and things will get better again after this correction.'
Copper for three-month delivery in London climbed to $6,759.25 a ton today after finishing at the lowest since June 18 yesterday. Lead increased 0.8 percent.
West Texas Intermediate crude oil advanced 0.4 percent to $91.27 a barrel after the China data today, while Brent added 0.4 percent to $97.30.
Raw materials prices have suffered amid signs of slower growth in China, with the Bloomberg Commodity Index closing at the lowest since 2009 yesterday. Nickel in London pared its decline to 0.7 percent and traded at $16,875 after earlier touching $16,483. If prices ended below $16,800, or 20 percent below the closing high of $21,000 on May 13, the metal will have met the common definition of having entered a bear market.
The price of iron ore delivered to Qingdao in China slid a fifth day, declining 1.1 percent to $80.10 a dry metric ton yesterday, a five-year low. Iron ore is Australia's biggest export and China is the nation's No. 1 trading partner.
Gold for immediate delivery advanced 0.4 percent to $1,219.91 an ounce and palladium was at $805.65. Silver, which slumped 5.2 percent in the four days through yesterday, increased 0.3 percent to $17.7985.
To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net
To contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net; Nick Gentle at ngentle2@bloomberg.net Nick Gentle
{ 0 comments... Views All / Send Comment! }
Post a Comment