Asian shares mostly higher on strong Japan factory data

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A cleaner walks by investors monitor stock prices at a brokerage house in Beijing, Wednesday, Oct. 24, 2018. Asian markets are mixed on Wednesday after U.S. companies, including those that outperformed in the third quarter, cautioned against escalating a trade dispute with China. (AP Photo/Andy Wong)

Asian markets have bounced back from their retreat after the report of strong preliminary manufacturing data in Japan.

KEEPING SCORE: Japan's Nikkei 225 index jumped 0.5 percent to 22,130.30 as a private survey suggested a recovery in manufacturing in October. The Shanghai Composite index, which closed more than 2 percent lower on Tuesday, jumped 1.5 percent to 2,634.50 and Hong Kong's Hang Seng index surged 0.9 percent to 25,565.27. The Kospi in South Korea picked up 0.2 percent to 2,109.66. Australia's S&P-ASX 200 lost 0.1 percent to 5,839.10. Shares were higher across the region apart from in Thailand.

JAPAN FACTORY OUTLOOK: A rise in the preliminary, or "flash" purchasing manager's index to 53.1 in October from 52.5 the month before raised hopes that recent sluggishness in manufacturing demand may have been transient. A revival in new export orders, to 51.7, a seven-month high, was viewed as especially good news given concerns over China-U.S. trade tensions. Readings above 50 in the survey indicate expansion.

ANALYST'S VIEWPOINT: "Following a rather disappointing slew of PMI data over the third quarter, Japan's manufacturing sector looks set to start Q4 on a more upbeat note. The latest survey indicated stronger expansions in all the key barometers of macroeconomic health," Joe Hayes, economist at IHS Markit, which compiles the survey, said in a commentary.

WALL STREET: U.S. indexes fell on Tuesday following a broad-sell off on softening growth in China and fears that tariff hikes are beginning to hurt corporate earnings. The S&P 500 index suffered its fifth-straight loss, dropping 0.6 percent to 2,740.69. The Dow Jones Industrial Average shed 0.5 percent to 25,191.43 and the Nasdaq composite fell 0.4 percent to 7,437.54. The Russell 2000 index of smaller-company stocks was 0.8 percent lower at 1,526.59.

U.S. EARNINGS: Sentiment was dampened as large U.S. companies kicked off a busy earnings week with warnings of rising costs related to tariffs. Heavy equipment maker Caterpillar posted a larger profit and revenue than expected in the third quarter. But the company said Trump's taxes on imported steel were driving up production costs, causing its shares to slip 7.6 percent to $118.98. 3M, the maker of Post-it notes and ceramic coatings, reported disappointing revenues and said it anticipates about $100 million in extra costs next year. That sent its shares tumbling 4.4 percent. The U.S. and China are locked in a trade dispute over technology and have raised tariffs on billions of dollars of each other's goods.

ENERGY: Oil futures rose after the opening of a high-profile investment conference in Saudi Arabia, amid controversy surrounding the killing of a dissident journalist. Benchmark U.S. crude added 13 cents to $66.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 7 cents to settle at $66.43 a barrel in New York. Brent crude, used to price international oils, gained 30 cents to $76.74 per barrel. In the previous session, it dropped $3.39 to $76.44 a barrel.

CURRENCIES: The dollar strengthened to 112.56 yen from 112.42 yen on Tuesday. The euro eased to $1.1472 from $1.1473.

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AP Business Writer Alex Veiga contributed to this report.