A reading on China’s manufacturing sector outpaced the drab expectations of the market, allowing the Asian shares to recover from the early losses on Tuesday, while easing the selling pressure on commodities.
China’s HSBC flash reading on manufacturing (PMI) sector for September surged 50.5 from last month’s 50.2 amid the confounding forecasts for a drop to 50.0.
Analysts said that the market was braced for something even worse but the slight relief boosted the Chinese stocks to move into the black, while the Australian dollar hopping higher. Beijing serves as the single biggest export market for Australia.
The flash PMIs had averaged 50.9 in the third quarter that is a gain from the 49.6 reading in the previous quarter, said Annette Beacher, head of Asia-Pacific research at TD Securities.
“After the dismal industrial production print for August, financial markets were largely of the view that the Asian giant is slowing at a more rapid pace than required. Hence, today’s print provides a welcome offset for the market,” said Beacher.
Meanwhile, the Shanghai Composite Index .SSEC gained 0.9 percent and the CSI300 .CSI300 of the major Shanghai and Shenzhen A-share listings bounced back to 0.8 percent.
The main index for Australia .AXJO rolled smartly higher to be up one percent. On the other hand, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS increased 0.2 percent. The markets in Japan were shut for a holiday.
Meanwhile, the shares begun badly after Wall Street dipped overnight. The Dow .DJI on Monday closed trading down 0.62 percent and the S&P 500 .SPX fell 0.8 percent, while the Nasdaq .IXIC was down 1.14 percent.
The S&P recorded the biggest one-day decline since early August.