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Asian shares up after China PMI data

Thursday, September 01, 2011 - 02:13

Sept. 1 - Asian stocks open September higher, extending a recovery from a sharp sell-off in August; China's manufacturing data provides some reassurance. Toshi Maeda reports.

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Asian stocks rose on Thursday (September 1) with technology and consumer shares outperforming after China's factory output data provided some relief for markets across the region. The latest Chinese surveys showed China managed modest improvement in the manufacturing sector in August thanks to solid domestic demand. The Asia Pacific share index ex-Japan was 1.8 percent higher, while Japan's benchmark Nikkei gained 1.2 percent, clearing the key 9,000 level for the first time in two weeks. Benchmarks in Hong Kong and Australia gained for a fourth straight day. China's official Purchasing Manager's Index, which previews business conditions in factories, rose for the first time since March, allaying fears that China's economy is poised for a serious slump. The latest reading may bolster Beijing's confidence that it has not tightened excessively and can still afford to target inflation. Mizuho Securities economist Shen Jianguang says the cost of living remains an issue for China. SOUNDBITE (English) MIZUHO SECURITIES ECONOMIST SHEN JIANGUANG, SAYING: "Inflation is still, rightly so as the government claims, the number one risk facing the economy and the number one task is to contain inflation. The PMI number tells us inflation pressure is still rising." Although China's growth may be slowing down, annual growth in factory output has held up above 13 percent, with Minelife analyst Gavin Wendt saying Beijing has managed the balance between inflation and growth well. SOUNDBITE (English) MINELIFE'S SENIOR RESOURCE ANALYST GAVIN WENDT SAYING: "The Chinese have done a very good job of the last five to six years of managing inflation, yet at the same time, keeping demand, domestic demand bubbling along. And that's why the Chinese economy is in, I guess, very good sound shape that it is right now." Wendt predicts gold will keep climbing not just for better returns, but also for wealth preservation, and expects oil to climb back above $100 a barrel by the end of the year. Toshi Maeda, Reuters.

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Asian shares up after China PMI data

Thursday, September 01, 2011 - 02:13