China Leads Asia-Pacific Stocks Higher

By Lucy Craymer Features Dow Jones Newswires

Asia-Pacific stocks started September on a positive note, led by gains in China, after a private gauge of Chinese factory activity rose for the third straight month in August.

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"Sentiment is positive in China," said Will Leung, head of investment strategy at Standard Chartered Wealth Management. He noted people are optimistic that Chinese economic data due next week will also show improvement after a soft batch of readings for July.

The August reading of Caixin's manufacturing purchasing managers index, 51.6, was the second-highest of 2017. The 50 level separates growth in manufacturing activity from a contraction.

The Shanghai Composite Index finished morning trading up 0.6%, while stocks in Shenzhen reversed early weakness to also trade higher. The Chinese equities gains also helped Hong Kong's Hang Seng Index reverse some of Thursday's pullback; it ended the morning session up 0.3%.

Elsewhere, stock markets in Asia were muted as a solid earnings season has come to an end, removing a potential market catalyst.

"There are a lot of moving parts in the news flow at the moment, but no one is really making the connection between these and the markets," said Chris Weston, a strategist at IG Markets. At the same time, markets aren't concerned about geopolitics, Tuesday's selloff notwithstanding, he added.

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South Korea's Kospi was an exception Friday morning. After trading little changed the first hour of the day, it slid as much as 0.5% before quickly erasing much of that move. It has remained down 0.1% amid further improvement in the Korean won after its early-week slide. The dollar was off 0.5% in Asian trading.

The greenback's weakness also capped stock gains in Japan. The Nikkei started up as much as 0.5% but was recently just 0.1% higher. Still, the index is set to end a six-week losing streak, its longest since early 2014.

With September's arrival, the market is in what has historically been a selloff market, noted Tim Kelleher, head of foreign-exchange institutional training at ASB Bank in New Zealand. That might make investors somewhat wary of taking large positions near term.

An additional reason not to do so is Friday's forthcoming release of the monthly U.S. jobs report. A better-than-expected number could see the dollar undo the past day's reversal, Mr. Kelleher said.

Meanwhile, markets in Singapore, Indonesia, Malaysia and the Philippines were closed Friday for a holiday.

U.S. and global benchmark oil futures were down modestly in Asian trading after having jumped nearly 3% Thursday on a surge in U.S. gasoline futures amid continued supply worries after tropical storm Harvey shut down more than 20% of U.S. oil-refining capacity the past week. Gasoline was recently down 0.4%, with crude off about the same.

Write to Lucy Craymer at Lucy.Craymer@wsj.com

(END) Dow Jones Newswires

September 01, 2017 01:12 ET (05:12 GMT)