Asia stocks mixed after China PMI reports; Nikkei ends up 0.1%

Investing.com - Asian stock markets were mixed during late Asian trade on Monday, despite the release of upbeat Chinese manufacturing data, as investors continued to monitor negotiations among U.S. lawmakers to avoid the looming “fiscal cliff” crisis.

During late Asian trade, Hong Kong's Hang Seng Index fell 1%, Australia’s ASX/200 Index settled 0.6% higher, while Japan’s Nikkei 225 Index ended up 0.1%.

A report from HSBC released earlier confirmed that manufacturing activity in China expanded for the first time in more than a year last month. China’s HSBC Purchasing Managers Index rose to 50.5 in November from a final reading of 49.5 in October.
 
The data came after a report from the state-affiliated China Federation of Logistics and Purchasing over the weekend, which showed manufacturing activity improved to a seven-month high of 50.6 in November.

The upbeat data added to signs of growth recovery in the world’s second largest economy.

But gains were limited as investors remained concerned over the looming fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.

Shares in Hong Kong declined, turning lower after hitting the highest level of the year earlier in the session, as improving Chinese data means less need for further stimulus in the near-term.

The China banking sector were among the biggest drags on the index, with China Construction Bank shares dropping 1.7%, Industrial and Commercial Bank of China falling 1.5% and Bank of China declining 1.2%.

Hong Kong’s blue-chip exporters also contributed to losses, with clothing retailer Esprit Holdings down 1.15% and Li & Fung retreating 2.75%.

Elsewhere, in Tokyo, the Nikkei rose to a fresh seven-and-a-half month high earlier in the session, as expectations for further easing measures by the Bank of Japan continued to boost the market.

The Nikkei has rallied nearly 9% in the past two weeks, with exporters amongst the most notable gainers, as ongoing weakness in the yen boosted the outlook for export earnings.

The yen has been weighed by speculation the country’s main opposition leader, Liberal Democratic Party leader Shinzo Abe will win the upcoming general election on December 16.

Abe said recently that the Bank of Japan should employ unlimited monetary easing until inflation reaches 2%.

Shares in Japanese exporters with high exposure to China were in demand, with Hitachi Construction Machinery up 1.6%, Sumitomo Heavy industries gaining 3.5% and Japan Steel Works climbing 1.3%.

Meanwhile, in Australia, the benchmark ASX/200 Index advanced on the back of growing expectations for a rate cut by the Reserve Bank of Australia later in the week.

Expectations for a rate cut at the RBA’s upcoming policy meeting on Tuesday mounted after the minutes of the central bank’s November 6 policy meeting said “further easing may be appropriate in the period ahead”.

The nation’s big four banks were mostly higher, with Australia's biggest lender, the Commonwealth Bank of Australia surging 1.9%, ANZ Banking Group climbing 1.35% and Westpac Banking Group trading up 0.25%.

Looking ahead, European stock market futures pointed to a higher open, boosted by encouraging Chinese economic data and Friday’s decision by Germany’s parliament to approve a new aid package for Greece.

The EURO STOXX 50 futures pointed to a gain of 0.25% at the open, France’s CAC 40 futures added 0.25%, London’s FTSE 100 futures eased up 0.1%, while Germany's DAX futures pointed to a rise of 0.15% at the open.

Euro zone finance ministers were to hold talks in Brussels later in the day to discuss the terms of the new Greek aid deal, as well as details of an EUR10 billion bailout for Cyprus.

Later Monday, the Institute of Supply Management was to produce a report on manufacturing growth in the U.S.