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Asian Shares Mixed After Chinese Data

stockmarkets jan18 03aug20 lt

Asian stocks ended mixed on Monday as upbeat factory activity data was offset by lingering worries about the relentless surge in coronavirus cases around the world and rising U.S.-China tensions.

Chinese shares rallied after survey results from IHS Markit showed the country's manufacturing sector expanded at the fastest pace since early 2011. The Caixin manufacturing Purchasing Managers' Index rose to 52.8 in July from 51.2 in June, as market conditions continued to recover from the coronavirus outbreak.

Supporting the higher PMI figure was a steeper increase in production across Chinese manufacturing firms. Output expanded for the fifth month in a row, and at the fastest rate for nine-and-a-half years, with many companies citing greater client demand.

The benchmark Shanghai Composite Index jumped 57.96 points, or 1.8 percent, to 3,367.97, although Hong Kong's Hang Seng Index fell 137.22 points, or 0.6 percent, to 24,458.13.

Japanese shares posted strong gains to snap a six-day losing streak as the yen retreated from a 4-1/2-month high against the dollar and a survey showed the manufacturing sector in the country contracted at a slower rate in July.

The Nikkei 225 Index surged up 485.38 points, or 2.2 percent, to 22,195.38 after plunging 4.6 percent last week. The broader Topix closed 1 percent higher at 1,522.64, recovering from a two-month low hit on Friday.

Yamato Holdings Co. spiked 5.5 percent after the courier service operator forecast a 43.2 percent jump in operating profit for the fiscal year.

Meanwhile, Keyence Corp. tumbled 3.9 percent after the factory automation equipment maker logged a 21.9 percent decline in its March-June operating profit.

Seven & i Holdings Co. lost 4.8 percent after the retail group agreed to buy U.S. gas stations Speedway from Marathon Petroleum.

Japan's final reading for gross domestic product in the first quarter of 2020 was unrevised, the Cabinet Office said today, showing a 2.2 percent annualized decline and a seasonally adjusted 0.6 percent quarterly contraction. That was unchanged from June's advance reading and was in line with expectations.

Australian markets fluctuated before finishing marginal lower after the reintroduction of lockdown measures in Victoria. The big four banks fell 2-4 percent ahead of the RBA monetary policy meeting on Tuesday, with no changes to policy expected.

Energy companies rose broadly despite oil prices moving lower in Asian trading on fears that impending relaxations in production cuts from OPEC and its allies would result in oversupply.

Gambling and entertainment company Tabcorp Holdings declined 1.7 percent after it warned of A$1.1 billion in impairments.

Miners BHP and Rio Tinto gained 1.6 percent and 1 percent, respectively, while gold miners Evolution Mining and Northern Star Resources climbed about 3 percent.

On the economic front, the latest survey from the Australian Industry Group revealed that the manufacturing sector in Australia continued to expand in July, and at a faster pace, with a seasonally adjusted Performance of Manufacturing Index score of 53.5, up from 51.5 in June.

Seoul stocks recovered from an early slide to end on a flat note amid renewed concerns over the resurgence of Covid-19 infections around the world and the political feud between the United States and China, South Korea's two largest trade partners.

EV battery makers and tech shares bucked the trend to end higher after the latest PMI data signaled a solid improvement in the health of China's manufacturing sector in July. Samsung SDI surged 4.3 percent and internet giant Naver jumped 4.5 percent. LG Chem shares soared 11.8 percent to hit a record high.

The manufacturing sector in South Korea continued to contract in July, albeit at a slower rate, the latest survey from Markit Economics showed with a six-month high manufacturing PMI score of 46.9. That's up from 43.4 in June.

New Zealand shares finished modestly lower, with the benchmark NZX-50 Index ending down 61.54 points, or 0.5 percent, at 11,666.09, dragged down by dual-listed banks Westpac and ANZ.

U.S. stocks ended mostly higher on Friday as better than expected quarterly results from several leading technology companies overshadowed continued uncertainty about the government's next round of coronavirus aid.

The Dow Jones Industrial Average inched up 0.4 percent, the tech-heavy Nasdaq Composite index rallied 1.5 percent and the S&P 500 added 0.8 percent.

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