Asian markets higher in bargain hunting

Agence France-Presse

Posted at Oct 01 2010 01:50 PM | Updated as of Oct 01 2010 09:50 PM

HONG KONG - Asian stock markets rose on Friday as traders picked up bargains after recent losses while strong manufacturing data from China eased fears of a slowdown in the world's second biggest economy.

Tokyo rose 0.89% by the break, Sydney edged up 2.2 points and Singapore added 0.31% while Seoul lifted 0.48%.

Hong Kong and Chinese markets were closed for public holidays.

Analysts said traders stepped in to pick up undervalued shares after they slipped on Thursday in Asia on lingering concerns about the state of the global economy.

Japanese traders were given a mixed bag as data showed consumer prices slipped for an 18th straight month in August, stoking concerns over deflation, while the unemployment rate edged down.

Tokyo said the core consumer price index, which excludes volatile fresh food items, edged down 1% in August, in line with expectations and following similar falls in June and July.

The news will add extra pressure on the Bank of Japan to take more steps to support the fragile economy, which has seen its export sector hammered by the surging yen.

The Japanese unit stood at 83.47 against the dollar in morning Tokyo trade, compared with 83.46 in New York late on Thursday.

However, the greenback has slipped more than two yen since Japan stepped into the currency markets on September 15 to halt the rise of the yen, which hit a 15-year high of 82.86 before the intervention.

The yen's rise has been capped by possible further intervention from Japan, while the dollar has also been pressured by expectations the US Federal Reserve will soon announce monetary easing measures to support its economy.

"It is clear that the intervention (to stem the yen's rise) was not enough to support the stock market, so investors are expecting more drastic measures," Kyoya Okazawa, managing director at Credit Suisse, told Dow Jones Newswires.

The euro rebounded to fetch $1.3651, up from $1.3634 in New York late Wednesday and was also higher against the yen at 114.05 from 113.61.

The European was hit on Thursday by a downgrade of Spain's credit rating by Moody's as well as a larger-than-expected bailout by Dublin of Anglo Irish Bank.

Regional markets were given a fillip by a survey out of China showing manufacturing activity had picked up in September.

The purchasing managers index rose to 53.8 in September from 51.7 in August, the China Federation of Logistics and Purchasing (CFLP) said in a statement.

The results come after an independent survey by HSBC showed manufacturing hit a five-month high last month.

The HSBC China Manufacturing PMI rose to 52.9 in September up from 51.9 in August as production and new orders rose.

A reading above 50 means the sector is expanding, while below 50 indicates a decline.

The news was welcomed by traders as many Asian exporting nations rely heavily on China's huge appetite to help power their economies.

On oil markets New York's main contract, light sweet crude for delivery in November, rose 15 cents to $80.12 a barrel and Brent North Sea crude for November delivery gained nine cents to $82.40.