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Stocks rise across Asia on China economic uptick

Investing.com - Asian equities traded broadly higher Monday morning, buoyed by good economic news out of China.

China’s official Manufacturing Purchasing Index (PMI) released on Saturday came in at 50.2, in the first reading since April to top the 50 mark that shows expansion. On Monday morning, the private Caixin/Markit PMI came in at 51.8, up from 51.7 in October and ahead of expectations.

“The synchronized improvement in the survey data does point toward some uptick in growth last month,” Julian Evans-Pritchard, a senior China economist at Capital Economics told CNBC.

Hong Kong’s Hang Seng Index was up 0.5% to 26,505 by 9:20 PM ET (02:19 GMT) in early morning trade as the positive economic data out of China overshadowed the return of protesters to the streets of Hong Kong after two weeks of relative calm.

China’s Shanghai Composite rose 0.49% to 2,886 while the SZSE Component rose 0.51% to 9,631.

Still, markets remain wary of any faltering in trade negotiations between the US and China. Over the weekend, the nationalist Global Times tabloid tweeted that any phase one deal would have to be tied to a rollback in US tariffs on Chinese goods. As things stand today, the next batch of tariff increases will take effect on Dec. 15.

In October, US President Donald Trump suggested a phase one deal was basically in place but nothing has been signed yet.

Forward movement in trade negotiations would help repair business confidence and give both manufacturing and investment a boost, said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group in a note.

The positive news out of China helped other markets in the region rise.

Japan’s Nikkei 225 rose 0.99% to 23,558, recovering from falls late last week after Japanese data showed industrial output fell 4.2% in October from the previous month and retail sales fell 7.1%, the biggest fall since 2015. Expectations are on the rise that the Bank of Japan will ease policy to counteract the impact of a high in sales tax from 8% to 10% that took effect on Oct. 1.

South Korea’s KOSPI was up 0.54%.

Down under, Australia’s S&P/ASX 200 climbed 0.40%.

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