Major Asian markets showed gains on December’s first trading day after a welcome surprise from Chinese factory data.
The Nikkei 225 rose one per cent on Monday, its highest increase in a month, as data showed that Chinese manufacturing and domestic demand grew, suggesting Beijing’s stimulus measures are beginning to have an effect.
The Caixin/Markit manufacturing Purchasing Manager’s Index for the month beat economists’ expectations, reaching 51.8, rather than the 51.4 predicted by a Reuters poll.
Neil Wilson, chief markets analyst at markets.com, said: A”fter Eurozone PMIs last week also showed promise, it’s another tentative sign that global PMIs have bottomed.”
The Japanese index ended up at 23,529.5, taking its total gain for the year to 16.4 per cent. A separate survey of Chinese manufacturing data was revised to show the fastest growth in three years.
The Topix index also rose 0.89 per cent to finish at 1,714.5.
The improvement comes despite the continuing risk of a trade war between the US and China. According to Axios, a phase-one deal between Washington and Beijing is now likely to happen at the end of the year earliest.
China’s Global Times tweeted yesterday that the Chinese government wants tariffs to be rolled back as part of the phase one trade deal with the US, citing unidentified people in Beijing
Ian Williams, economics and strategy research analyst at Peel Hunt, described China’s PMI as an “upside surprise”, adding that the Nikkei was also boosted by reports that Japan was planning an aggressive stimulus package.
“The rebound in Chinese manufacturing data is supporting Japanese shares,” said Hideyuki Ishiguro, senior strategist at Daiwa Securities in Tokyo.
“In addition, U.S. online sales on Black Friday are another positive sign. If the world’s two largest economies are on solid footing, then this is a good thing for Japanese companies.”
On the mainland, the Shanghai composite rose 0.13 per cent to 2,875.8, whilst the Hang Seng climbed 0.39 per cent to 26,449.08.