Asia Stocks Trade Higher As Investors Await Chinese Manufacturing Data

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Stocks in Asia traded higher Monday morning as official data over the weekend showed Chinese factory activity rising unexpectedly in November.

Japan's Nikkei 225 rose 0.76% in early trade, with shares of index heavyweight and robot maker Fanuc gaining 1.03%. South Korea's Kospi also advanced 0.62%.

Meanwhile, shares in Australia also edged higher as the S&P/ASX 200 gained 0.44%.

Overall, the MSCI Asia ex-Japan index traded 0.16% higher.

China's manufacturing data

Investors will await the release of a private survey of Chinese factory activity, with the Caixin/Markit manufacturing Purchasing Managers' Index set to be out around 9:45 a.m. HK/SIN.

Data released over the weekend showed the official Purchasing Managers' Index (PMI) was at 50.2 in November, according to China's National Bureau of Statistics. That was beyond expectations of a November reading of 49.5 by analysts in a Reuters poll. The official PMI reading had come in at 49.3 in October.

The 50-point mark separates growth and contraction in PMI readings.

"The move back into expansionary mode in China's official manufacturing PMI is good news ... (but) also somewhat tempered by the facts China's industrial sector is still besieged by deflationary risks and rising borrowing costs while the domestic consumer remains constraint by higher food prices," Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a note.

Uncertainty continued to cloud the outlook for U.S.-China trade negotiations and protests in Hong Kong. Chinese state media said Sunday that Beijing wants a rollback of tariffs in the phase one trade deal that the two economic powerhouses are aiming to reach.

Meanwhile, civil unrest continued to rock Hong Kong as the city saw fresh protests over the weekend.

U.S.-China tensions heightened last week after U.S. President Donald Trump signed two pieces of legislation supporting protestors in Hong Kong, prompting China's foreign ministry to claim Washington has "sinister intentions" after the bills were signed into law. A spokesman for the Chinese foreign ministry added Friday the country will take "strong counter-measures" against the U.S.

The situation in Hong Kong has raised concerns of strains in trade negotiations between Washington and Beijing ahead of Dec. 15, when new tariffs on Chinese exports to the U.S. are set to kick in.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.297 after spiking to levels above 98.4 late last week.

The Japanese yen traded at 109.56 against the dollar after weakening from levels below 108.9 last week. The Australian dollar changed hands at $0.6764 after declining from levels above $0.678 in the previous trading week.

Oil prices rose in the morning of Asian trading hours. International benchmark Brent crude futures added 1.12% to $61.17 per barrel. U.S. crude futures gained 1.38% to $55.93 per barrel.

What's on tap:

  • China: Caixin Manufacturing PMI for November at 9:45 a.m. HK/SIN
  • Hong Kong: Retail sales for October at 4:30 p.m. HK/SIN