By Natalie Thomas
BEIJING Nov 1 Asia's factory sectors grew at
their fastest pace in months in October led by China, providing
some signs of a pick up in global demand as export orders
China's official purchasing managers' index (PMI) rose to an
18-month high and South Korea's HSBC index pointed to expansion
for the first time in five months. Taiwan's PMI reached its
highest level since March 2012, Indonesia's index hit a
four-month high and Japan's PMI rose to its strongest level in
well over three years.
The major Asian economies of China, Japan, South Korea and
India reported new export orders expanding simultaneously for
the first time since May, which economists attributed partly to
brighter prospects in Europe.
"Overall, the data is positive for global demand," said
Radhika Rao, an economist with DBS in Singapore. "There are
reasons to be optimistic, but cautiously optimistic," she said.
The surveys provide a more upbeat view of world demand
following a month in which a political standoff in Washington
over the U.S. debt ceiling and the sixth straight cut in IMF
global economic forecasts had raised fresh concerns about the
health of the global economy.
India was the exception among a group of generally upbeat
PMI reports in Asia. Although new exports orders picked up
sharply, the HSBC PMI for India showed manufacturing activity
shrank for a third straight month, a further sign of a slowdown
in Asia's third-biggest economy.
HSBC's chief economist for India, Leif Eskesen, said
inflation suggested the central bank, the Reserve Bank of India
(RBI), would not have room to provide any support for growth.
"Input price inflation accelerated further despite the weak
growth backdrop, as the effects of the depreciated exchange rate
continue to pass through. This suggests that the RBI has to
continue its staring contest with inflation," Eskesen said.
China's official PMI rose to 51.4 in October from 51.1 in
September, topping expectations for a reading of 51.2.
A similar report from HSBC/Markit increased to 50.9, a
seven-month high. It showed a tick up in the pace of new
domestic and export orders, as well as the first increase in
employment in seven months.
China's reassuring PMI reading limited losses in Asian
stocks, which were under pressure after strong U.S. data added
to uncertainty over when the U.S. Federal Reserve might begin to
ease back on its stimulus.
The HSBC/Markit PMI for South Korea showed factory activity
expanded for the first time in five months in October and a
separate report said the value of exports in the month handily
beat expectations to hit a record high of $50.5 billion.
Factory activity in major exporter Taiwan, key to many
global tech supply chains, was running at its fastest pace since
Japan reported on Thursday that its factory activity grew at
the fastest pace in more than three years as the Markit/JMMA PMI
rose to a seasonally adjusted 54.2, adding to hopes that the
world's third-largest economy and home to big brand names like
Sony and Toyota is pulling out of two decades of stagnation.
India's HSBC PMI compiled by Markit was
unchanged at 49.6 in October, indicating the sector was
The downbeat data did little to shake stock market sentiment
though. The main share index hit a record high fuelled
by foreign money flowing into the country.