Asia-Pacific Stocks Advance Despite Softer Chinese Factory Data; South Korea’s Kospi Sets Record Close

Equity benchmarks across the Asia-Pacific region finished higher on Monday, even as fresh figures signaled that growth in Chinese manufacturing cooled more than economists expected. The session was highlighted by South Korea’s Kospi, which closed at an all-time peak, while investors also weighed upcoming policy decisions in Australia and a holiday-shortened trading week in Japan.

China’s PMI Slips Below Forecasts

Private-sector data released by RatingDog showed that China’s October manufacturing purchasing managers index (PMI) slipped to 50.6, undershooting the 50.9 consensus compiled by Reuters and retreating from September’s 51.2. A reading above 50 still indicates expansion, yet the slower pace reinforced concerns raised late last week when the National Bureau of Statistics reported an official PMI of 49.0, marking the lowest level in six months and signaling contraction.

The moderation in factory activity limited early gains in mainland equities, but dip-buyers eventually emerged. The CSI 300 erased morning losses to add 0.11%, while Hong Kong’s Hang Seng advanced 1.03%. Market participants assessed the data against broader expectations that Beijing will maintain a measured approach to stimulus as it balances growth objectives with financial stability.

Kospi Leads Regional Rally

South Korea’s benchmark Kospi jumped 2.78% to finish at 4,221.87, surpassing the previous record and notching its largest one-day increase since June. Gains were broad-based, supported by heavyweight technology names and an improved outlook for memory-chip demand. The small-cap Kosdaq index rose 1.57% to end at 914.55.

Analysts attributed the surge to resilient corporate earnings and easing external headwinds. Continued strength in semiconductor exports has underpinned sentiment, while the prospect of a soft landing for the global economy has reduced fears of an abrupt slowdown in electronics demand.

Mixed Performances Elsewhere

In Australia, the S&P/ASX 200 edged up 0.15% to close at 8,894.8. Traders largely stayed on the sidelines ahead of the Reserve Bank of Australia’s two-day policy meeting that begins today. Economists broadly anticipate the central bank will keep its cash rate unchanged, even after third-quarter inflation exceeded forecasts. The decision is due on Tuesday.

Indian benchmarks were narrowly lower. The Nifty 50 and the Sensex each traded just below the flatline as investors awaited a raft of domestic earnings reports later in the week. Japanese markets were closed for a national holiday, leaving Tokyo-listed exporters unaffected by the regional moves.

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Wall Street’s Friday Momentum Carries Over

Positive sentiment in Asia followed a modest uptick in U.S. stocks at the end of last week. On Friday, the technology-heavy Nasdaq Composite gained 0.61% to 23,724.96, the S&P 500 added 0.26% to 6,840.20, and the Dow Jones Industrial Average closed fractionally higher at 47,562.87. The advancements came as investors digested mixed corporate results and looked ahead to the Federal Reserve’s next policy meeting, scheduled for mid-November.

Despite the upbeat finish, U.S. futures were little changed during Asian trading hours, reflecting caution ahead of the latest readings on job openings and payrolls due later this week.

Key Themes for the Week

Market attention in the days ahead will center on monetary policy and economic indicators. Besides the RBA decision, traders will monitor China’s trade data and consumer inflation figures for additional clues on the strength of the world’s second-largest economy. In the United States, the October employment report is expected to provide insight into labor-market resilience and its implications for the Federal Reserve’s interest-rate trajectory.

Global investors also continue to track geopolitical developments and their potential impact on supply chains. According to the International Monetary Fund, manufacturing activity across Asia remains a critical barometer for worldwide trade flows, underscoring the significance of the latest PMI readings.

Crédito da imagem: Visual China Group