Asian Shares Gain On Strong Chinese Data

Asian stock rose broadly on Wednesday as strong manufacturing data from China helped offset investor concerns over stubborn inflation and fears of further U.S. interest rate hikes.

India and Australia reported a slowdown in GDP growth in the quarter to December, while South Korea’s exports fell in February for a fifth straight month, regional data showed.

Chinese shares rose sharply after the release of upbeat data. The benchmark Shanghai Composite Index jumped 1.0 percent to 3,312.35, while Hong Kong’s Hang Seng Index soared 4.2 percent to 20,619.71.

Factory activity expanded at its fastest pace in more than a decade in February, and the services sector also continued its recovery last month after the removal of stringent coronavirus measures late last year, data showed.

The official manufacturing purchasing managers’ index (PMI) rose to 52.6 from 50.1 in January, according to the National Bureau of Statistics.

The official non-manufacturing PMI, measuring business sentiment in the services and construction sectors, rose to 56.3 from 54.4 in January.

The Caixin/S&P Global manufacturing PMI also rose to 51.6 from 49.2 in January, marking the first monthly expansion since July and the highest reading since June-

Japanese shares ended slightly higher even as new data pointed to continually deteriorating activity in the country’s manufacturing sector midway through the first quarter of 2023.

The Nikkei 225 Index edged up 0.3 percent to 27,516.53, led by oil explorers such as Japan Petroleum and Inpex Corp. The broader Topix closed 0.2 percent higher at 1,997.81.

Ajinomoto shares soared 9.3 percent after the processed food maker raised its fiscal-year net profit guidance.

South Korean markets were closed for a national holiday. Australian markets finished marginally lower as investors reacted to softer-than-expected growth and inflation data.

Financials tumbled, with the big four banks falling 1-2 percent ahead of the RBA’s interest rate decision next week. Miners jumped, with BHP, Rio Tinto and Fortescue Metals Group rallying 2-3 percent.

Energy stocks also ended broadly higher as oil prices extended gains for a second day running on improved China data.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.2 percent to 11,876.35 on disappointing building permits data.

U.S. stocks ended on a subdued note overnight to log monthly declines amid expectations the Fed will maintain interest rates higher for longer.

In economic news, consumer confidence declined again in February, while Chicago-area business activity unexpectedly contracted at a slightly faster rate in the month, separate reports showed.

The Dow slid 0.7 percent to reach its lowest closing level in well over three months, while the S&P 500 eased 0.3 percent and the tech-heavy Nasdaq Composite edged down 0.1 percent.