Asian Stocks Advance on Upbeat US Data
By Satya Nagendra | October 4, 2012 6:17 PM EST
Asian stock markets advanced Thursday as better-than-expected economic reports from the U.S. buoyed sentiment.
Japanese benchmark Nikkei gained 0.89 percent or 77.72 points to 8824.59, Hong Kong's Hang Seng rose 0.09 percent or 19.77 points to 20908.50 and India's BSE Sensex surged 1.14 percent while South Korean KOSPI Composite fell 0.17 percent. Shanghai will remain closed for a week on holiday.
Markets opened on a positive note as sentiment turned positive overnight following better-than-expected economic reports on U.S. private employment and the Institute for Supply Management’s (ISM) services data, suggesting that the strength of economic recovery in the world's largest economy is gaining some traction.
The U.S. services sector expanded at a faster rate than expected in September as new orders accelerated. The ISM non-manufacturing index, which rates the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries and inventories, rose to 55.1 in September from 53.7 in August and surpassed Reuters' estimate for a slight decline to 53.2.
Payroll firm ADP Employer Services said that the U.S. private sector added 162,000 jobs in September, down from upwardly 189,000 jobs added in August but topped analysts’ estimation of 140,000 new jobs. The ADP data came two days before the government's monthly nonfarm payroll report, which is the most closely-watched economic data pertaining to the jobs market and is a key gauge for the direction and pace of the economic recovery.
The improvement in the non-manufacturing activity, combined with better-than-expected private sector hiring, raised hopes that September employment report would be better than what the initial consensus had indicated.
“Markets were given a boost as US recovery hopes strengthened in the wake of encouraging data out of the US, with both the ADP private sector jobs report and ISM non manufacturing index beating forecasts. Consequently the data has led us to revise higher our expectations for September nonfarm payrolls to +135k,” said a note from Credit Agricole.
Japanese stocks advanced, led by gains from exporter companies as the yen declined against major counterparts. Toshiba Corp. surged 3.89 percent and Toyota Motor Corp. advanced 3 percent while Nissan Motor Co Ltd. climbed 5.11 percent.
In Hong Kong, HSBC Holdings PLC advanced 2 percent and Lenovo Group gained 0.31 percent while Bank of Communications rose 1.91 percent.
Energy shares went down across the region on lower oil prices. JX Holdings Inc. declined 1.81 percent in Tokyo while CNOOC Ltd. fell 1.89 percent in Hong Kong.
In Seoul, Samsung Electronics fell 0.15 percent and SK Innovation Co Ltd. declined 2.04 percent while SK Hynix Inc. gained 2.89 percent.
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