Asian shares turned higher Thursday, shaking off a weak start following an encouraging reading on non-manufacturing activity in China.
Stocks in Hong Kong HK:HSI +0.84% and Australia AU:XJO +0.37% led gainers in Asia’s major stock markets as benchmarks there each traded roughly 0.8% higher. Japan’s Nikkei JP:NIK -0.09% also turned higher as the U.S. dollar gained ground against the yen, rising to ¥97.55 from ¥97.36 late Wednesday in New York. Markets in mainland China remained closed for the Golden Week holiday.
China’s official non-manufacturing Purchasing Managers’ Index rose to a six-month high of 55.4 in September from 53.9 in August, adding to a growing roster of evidence that China’s economy has turned a corner in recent months.
“The move higher is encouraging as it suggests the service sector is coping well with the recent government clampdowns,” said Andrew Sullivan, head of sales trading at broker Kim Eng in Hong Kong.
Taiwan’s Taiex XX:Y9999 +1.73% rose 1.4% as stocks tied to improving domestic demand in China rallied. Food maker Uni-President Enterprises TW:1216 +5.12% jumped 4.8% and energy firm Formosa Petrochemical TW:6505 +2.45% gained 1.7%.
Markets in South Korea KR:SEU +0.03% were closed for the National Foundation Day holiday.
Asian trade had started off on a cautious note as investors nervously eyed a protracted government shutdown in the U.S. Thousands of federal workers in the country remained on furlough for a second day Wednesday as lawmakers continued to clash over funding for the U.S. budget. The battle over spending is casting increasing doubt on the likelihood lawmakers will forge an agreement on raising the country’s debt limit this month.
Wall Street closed in negative territory Wednesday, leaving U.S. stocks down for eight out of the last 10 sessions. The S&P 500 SPX -0.07% declined 0.1% and the Dow Jones Industrial Average DJIA -0.39% fell 0.4%.