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Asia: Stocks edge up as relief bounce continues, China PMIs awaited

Thursday, October 1, 2015 - 08:53
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[TOKYO] Asian stocks edged up on Thursday as global equities found breathing space after their worst quarter in four years, although caution over China Purchasing Managers' Indexes due later in the session limited gains.

Stocks in Asia took heart from an overnight rally on Wall Street, where the S&P 500 gained 1.3 per cent and the Dow rose 1 per cent as bargain hunters scooped up beaten-down shares.

China's official manufacturing PMI due at 0100 GMT is expected to show factory activity shrank for a second straight month in September. This news will be followed by the final readings of September's Caixin/Markit manufacturing and services PMIs at 0145 GMT. "With the world so sensitive to China's growth prospects, today's manufacturing and services reports could drive sentiment," wrote Chris Weston, chief market strategist at IG in Melbourne.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent. Australian shares were 0.8 per cent higher. Japan's Nikkei took a lacklustre central bank "tankan" survey on business sentiment in stride and climbed 0.2 per cent.

Chinese financial markets will not have an immediate chance to react to the PMIs as they are closed Oct 1 to Oct 7 for national holidays.

In currencies, the dollar stood tall after an overnight boost from an upbeat US private-sector employment report.

US private employers added 200,000 jobs in September, according to the ADP National Employment Report, beating forecasts and hinting jobs growth may be sufficient for the Federal Reserve to raise interest rates later this year.

In September, the Fed opted against hiking interest rates, citing concerns about global risks and market tumult stemming from China. But in recent days top policymakers including Chair Janet Yellen have said the Fed could hike rates this year if the economy improves.

The euro was little changed at US$1.1172 after shedding 0.6 per cent overnight. The dollar was steady at 119.81 yen after nudging up overnight versus its Japanese counterpart.

The dollar index was flat at 96.266 after rising 0.2 per cent on Wednesday, with a rise in US Treasury yields in the wake of the bullish jobs report shoring up the greenback.

As with stocks, commodities caught a breather amid the lull in global risk aversion, with copper and nickel rallying as bearish investors closed out quarter-end positions and ahead of the Chinese holidays.

Industrial metals were boosted by a bounce in the shares of hard-hit commodity group Glencore.

Three-month copper on the London Metal Exchange went as high as US$5,192 a tonne, the highest since Sept 22.

Nickel jumped 5.3 per cent overnight to end at US$10,400 a tonne, the strongest since Sept 11.

US crude was up 0.5 per cent at US$45.31 a barrel despite a surge in US crude and gasoline stocks last week, with traders pointing to quarter-end "window dressing" by investors behind the gains.

REUTERS