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Asian shares jump as US rally offsets weak data

Pedestrians walk in front of a share prices board showing the Nikkei 225 index at the Tokyo Stock Exchange in Tokyo, Japan.
Kazuhiro Nogi | AFP | Getty Images
Pedestrians walk in front of a share prices board showing the Nikkei 225 index at the Tokyo Stock Exchange in Tokyo, Japan.

Asian equities kicked off the fourth quarter on a positive note on Thursday, as an overnight rally on Wall Street spurred risk appetite amid the release of key economic data from Asia's top two economies.

The Bank of Japan's quarterly tankan survey, released before the market open in Tokyo on Thursday, showed Japan's large manufacturers less optimistic than expected.

The large manufacturers' index for the September quarter stood at positive 12, compared with expectations in a Reuters poll for a positive 13. In the previous three months, the key large manufacturers' index came in at 15 – its highest level since March 2014.

For the December figures, the index was forecast at positive 10, in line with a Reuters poll.

"The BOJ [should be] pretty happy with these results. The deterioration in business sentiment was fully expected and it seems that the BOJ seems to have written off investor production and exports, at least in the near term so that's not the real surprise," HSBC's Japan economist Izumi Devalier told CNBC.

"I think they will focus more on the relatively strong non-manufacturing number which they think is more important for Japan's labor market developments, and the capex numbers [which] are very positive as well."

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Investors also eyed the latest readings of China's mammoth manufacturing sector, which painted a deteriorating picture in the world's second-biggest economy that suggests the need for further stimulus.

The government's official manufacturing purchasing managers' index (PMI) ticked up to 49.8, beating expectations of 49.6 and compared with a reading of 49.7 in August. The final Caixin/Markit PMI, meanwhile, fell to a fresh six-and-a-half-year low of 47.2 in September, versus an earlier flash estimate of 47.

"The official PMI came in slightly better than expected... while not seeing a further decline was a positive in itself given the heightened state of negativity around China at [the] moment, there was good news in the sub-sector breakdown," IG's market analyst Angus Nicholson wrote in a note issued late Thursday.

"The most important subsectors both improved: output rose to 52.3 from 51.7 and new orders rose to 50.2 from 49.7. These numbers do seem to be indicating that the declining activity numbers in China may have hit a floor as the effect of monetary easing and stepped-up fiscal spending start to be felt," the Melbourne-based analyst added.

Chinese markets will not have an immediate chance to react to the data barrage as they are closed for the week-long National Day holiday starting from today.

Overnight on Wall Street, the tech-heavy Nasdaq Composite led gains with a jump of 2.3 percent, while the Dow Jones Industrial Average and the S&P 500 closed up 15 and 1.9 percent respectively, following a rally in global markets.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Nikkei bounces 1.9%

Japan's Nikkei 225 index continued its up-climb after leaping 2.7 percent in the previous session, but came off slightly from the day's highs in the final minutes of trading.

Heavyweight components were among the best performers; industrial robot maker Fanuc climbed 3.9 percent, while SoftBank and Fast Retailing charged up 2.8 and 1.7 percent respectively.

Banking shares also gained ground, with Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group widening gains to 4.3 and 3.6 percent respectively. Brokerage firms also reversed a dismal start; Nomura Holdings and Daiwa Securities rose 2.4 and 3 percent respectively.

A tick-up in dollar-yen on the back of risk-on sentiment, delivered firepower to the export-oriented names. Nissan Motor was the biggest winner among automakers, up 5.1 percent, while Nikon jumped 4.2 percent.

Sony continued to attract hefty buy orders after Goldman Sachs initiated a 'buy' rating for the stock with a price target of 4,200 yen on Wednesday. Its shares closed up 3.4 percent late Thursday.

Scandal-ridden Toshiba gained 2.2 percent after its shareholders approved the new line up at the 11-member board late Wednesday. The tech giant was also given a lifeline by securing $3.3 billion from its main banks.

ASX rises 1.8%

Australia's S&P ASX 200 index headed further up north, brushing off the release of mixed factory activity data from its biggest trading partner, China.

Market bellwether BHP Billiton jumped 2.1 percent, mirroring the rise in its U.S. ADRs, as commodity prices bounced back. The energy sector got a lift from firmer crude oil prices in Asian trade; Santos, Woodside Petroleum and Oil Search advanced between 2.1 and 4.8 percent.

Oz Minerals leaped 19.6 percent to a three-month peak on the back of news that U.S. private equity giant KKR & Co bought a 10 percent stake in the copper miner.

Shares of Australia and New Zealand Banking (ANZ) elevated 1.6 percent after the lender announced that Shayne Elliott will replace Mike Smith as chief executive officer from January 2016. Elliott currently serves as ANZ's chief financial officer.

Other major lenders rose between 1.9 and 2.1 percent, underpinning strength in the Sydney bourse.

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Kospi gains 0.8%

South Korea's Kospi index climbed up to its highest level since September 22 after export data shrunk smaller than expected.

Exports fell 8.3 percent to $43.5 billion won from a year earlier, data from the Ministry of Trade, Industries and Energy showed early Thursday, above economists' forecasts in a Reuters poll for a 10 percent fall and compared with a shocking 14.9 percent slump in August. Imports declined 21.8 percent.

Imports plunged 21.8 percent on-year to $34.6 billion won last month, data showed, wider than August's 18.3 percent decrease and the market forecast for a 18.1 percent drop.

Meanwhile, the Nikkei/Markit PMI rose to 49.2 on a seasonally adjusted basis from 47.9 in August, signalling that the country's manufacturing sector may be on course for a recovery. The PMI reading is the highest since March.

Among gainers, Hyundai Motor and Posco gained 2.5 and 1.5 percent respectively, while Naver jumped 6.4 percent to its highest in three months as investors bet on improved earnings in the third quarter.