Asian Stocks Rise after Disappointing US Data, Brexit Drama
Asian stock markets rose Wednesday following surprise weakness in U.S. manufacturing and wrangling in Britain over the country's departure from the European Union.
Benchmarks in Shanghai, Tokyo and Hong Kong advanced.
The Institute for Supply Management, an association of purchasing managers, said its manufacturing index slid to a 3½-year low of 49.1 last month from July's 51.2.
Softer global demand, aggravated by the U.S.-Chinese tariff war, appears to be hurting American manufacturers. Public comments from companies surveyed by ISM pointed to economic uncertainty as a drag on their businesses.
"This is perhaps one of the stronger signs that the U.S. is likewise feeling the weight from the on-going uncertainties alongside the world," said Jingyi Pan of IG in a report.
In London, Prime Minister Boris Johnson suffered a setback when Parliament agreed to allow his opponents to introduce legislation that would block Britain from leaving the EU without an agreement on terms of their future trade and other relations. Britain is due to withdraw Oct. 31, a deadline the trade bloc's other members would have to agree to postpone.
Johnson's plan to call a new election to reinforce his position "could again induce more volatility," said Mizuho Bank in a report.
The Shanghai Composite Index rose 0.3% to 2,937.97 and Tokyo's Nikkei 225 gained 0.2% to 20,671.40. Hong Kong's Hang Seng advanced 1.3% to 25,854.88.
South Korea's Kospi gained 0.4% to 1,972.75 while Sydney's S&P-ASX 200 lost 0.5% to 6,543.00. India's Sensex opened down 0.3% at 36,456.33.
Markets in Taiwan, New Zealand and Singapore also advanced.
On Tuesday, technology companies drove a slide in U.S. stocks as markets reopened following a holiday weekend and the latest round of tariff hikes by Beijing and Washington on each other's imports.
The benchmark S&P 500 index dropped 0.7% to 2,906.27. The Dow Jones Industrial Average lost 1.1% to 26,118.02. The Nasdaq composite fell 1.1% to 7,874.16.
AUSTRALIAN ECONOMY: Australia's economic growth fell to a decade low, but the government tried to reassure the public the country wasn't headed for its first recession in 29 years. Data released Wednesday showed economy expanded by 1.4% in the year that ended in June and 0.5% in the latest quarter. Treasurer Josh Frydenberg told reporters economic fundamentals still are strong and the latest data fail to reflect the impact of cuts in taxes and interest rates.
ENERGY: Benchmark U.S. crude gained 27 cents to $54.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.16 on Tuesday to close at $53.94. Brent crude, used to price international oils, gained 22 cents to $58.48 per barrel in London. It lost 40 cents the previous session to $58.26.
CURRENCY: The dollar gained to 106.01 yen from Tuesday's 105.95 yen. The euro held steady at $1.0976.