Most Asian markets ended Wednesday’s session higher amid lingering optimism that the economic recovery will not be derailed. The Hong Kong market led the gains in the region with an over 1% advance. On the other hand, the Australian and Indian markets posted moderate losses. Positive domestic economic data also supported sentiment.
Japan’s Nikkei 225 average opened higher and hovered above the unchanged line throughout the session to close up 63.62 points or 0.67% at 9,559. Traders drew some comfort from positive business confidence data released by the Bank of Japan.
Most stocks advanced, with Ebara, Fuji Heavy Industries, Japan Steel Work, JX HD, Meidensha,Pioneer, Shinshei Bank and Toho Zinc advancing strongly in the session. However, utility stocksshowed marked weakness. Telecom and some financial stocks also declined.
The results of the Bank of Japan’s quarterly Tankan survey showed that the index of business conditions for large manufacturers rose to 8 in the third quarter from 1 in the second quarter. Economists had expected a more modest improvement to 7. However, the forecasts for the December quarter revealed a reading of –1.
Skepticism regarding the future was clearly evident in the investment plans of large firms, which expect to raise their spending by a mere 2.4% in the current fiscal year following a 15.5% drop in fiscal year 2009.
After showing some buoyancy in the morning, Australia’s All Ordinaries declined sharply in late morning trading. With the selling momentum slowing, the index declined steadily, dipping into negative territory by late trading. Thereafter, the sell-off accelerated and the index ended moderately lower. The market witnessed a broad based sell-off, with consumer staple stocks leading the declines.
Hong Kong’s Hang Seng opened notably higher and moved sideways for the rest of the session. The index closed up 268.72 points or 1.22% at 22,379. Thirty-eight of the forty-five index components closed the session higher.
The Chinese market slipped slightly despite the release of positive manufacturing data. The results of a private survey showed that China's manufacturing activity picked up to a five-month high in September, although it remained well below the record high levels registered at the start of the year.
Markit Economics said the HSBC manufacturing purchasing managers' index was at a seasonally adjusted 52.9, up from 51.9 in August. Chinese manufacturing output rose in September at a pace slightly above the long-run average. This was mainly due to an increase in the inflow of new orders, which rose for the second month in a row.