Asian stock markets cheer Wall Street gains, encouraging US manufacturing data

Wednesday, September 1, 2010

Asia stocks gain on brighter US manufacturing data

SEOUL, South Korea — Asian stock markets rose Thursday as investors hungry for good news seized on stronger U.S. manufacturing as a sign the world economy isn’t slowing as much as feared.

The second day of gains in the region follows a month of heavy selling amid jitters about the global recovery as figures from major economies suggested growth was faltering.

Some of that uncertainty was lifted after the Institute for Supply Management said manufacturing in the U.S. rose in August, in contrast to regional reports from recent weeks that pointed to waning activity.

The report came on the heels of Chinese figures showing that manufacturing growth improved and auto sales rebounded in August, suggesting the world’s second-biggest economy may not be slowing as quickly as feared.

“I think the fear of recession subsided so people are looking at the bright side — until the next set of economic data like unemployment,” said Francis Lun, general manager at Fulbright Securities in Hong Kong. “If unemployment rises the market will tank again, which means the recovery is really an illusion.”

The U.S. Bureau of Labor Statistics is scheduled to release nonfarm payroll and unemployment figures for August on Friday. Economists say the unemployment rate, which stood at 9.5 percent in July, must come down for there to be confidence a genuine recovery is taking hold.

Japan’s Nikkei 225 stock average gained 0.6 percent to 8,984.02. Tech issues rose, with Sony Corp. up 0.8 percent and Canon Inc. 0.3 percent higher.

Japanese automakers also gained, despite data showing that U.S. auto sales tumbled last month, making it the worst August since 1983. Shares of Nissan Motor Co., whose U.S. sales retreated by 7 percent from July, added 2.6 percent.

Hong Kong’s Hang Seng index jumped 1.3 percent to 20,886.11 and Seoul’s Kospi rose 0.3 percent to 1,770.18. Australia’s S&P/ASX 200 was up 0.6 percent to 4,521.10 after gaining 2.1 percent the day before on the country’s strongest economic growth figures in three years.

Energy shares were among the day’s gainers, lifted by a big jump in the oil price on Wednesday. Benchmark crude for October delivery rose $1.99, or 2.8 percent, to close at $73.91 a barrel on the New York Mercantile Exchange. Japan’s Inpex Corp. rose 1.5 percent, while Australia’s Woodside Petroleum Ltd. gained 0.8 percent.

In New York on Wednesday, the Dow Jones industrial average added 255 points, its best day since July 7 after the manufacturing figures boosted confidence in the recovery. The index finished up 2.5 percent to close at 10,269.47.

Broader indexes also posted large gains. The Standard & Poor’s 500 index rose 3 percent to 1,080.29, and the Nasdaq gained 3 percent, to 2,176.84.

In currencies, the dollar fell to 84.22 yen from 84.43 late Wednesday in New York. The euro slipped to $1.2792 from $1.2799.

Benchmark crude was down 16 cents at $73.75 a barrel in electronic trading on the New York Mercantile Exchange.


Associated Press Writer Tomoko A. Hosaka in Tokyo contributed to this report.

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