Mining Shares Climb in Asia on Higher Chinese Manufacturing Figures
In Asia Wednesday Hong Kong's Hang Seng Index climbed 1.2% to 22,379 and China's Shanghai Composite index remained virtually unchanged at 2,611. In Japan the Nikkei 225 Index rose 0.7% to end the day at 9,559.
Shares in Asia climbed with mining stocks leading the way after HSBC released a report saying that China's manufacturing activity sped up in September, along with a surge in export orders and purchasing.
Despite quivers among European economies, especially Spain, where strike action is beginning today in protest of government cuts, Asian firms are now counting on local demand to bolster profits. In the report, HSBC chief economist Hongbin Qu said, "A pick up in new orders means that domestic demand is still strong," reports AP. But the report also points out that exports declined for the three previous months and that the price of raw materials had increased -- tough for manufacturers but not a bad thing for shareholders in mining stocks.
In Hong Kong Aluminum Corp. of China climbed 4.4% and Jiangxi Copper soared 3.3%. Zijin Mining, which mines gold and other metals, surged 4.7% and Real Gold Mining advanced 3.9%. Coal miners also gained with Yanzhou Coal Mining shooting up 5% and China Shenhua Energy advancing 3.4%.
Also in Hong Kong a plot of land in pastoral Fan Ling, a location in the New Territories near the riding club that hosted the equestrian events of the Beijing Olympics, went to Sun Hung Kai Properties in an auction today. Although not an easy commute into town, word is that Sun Hung Kai will develop the plot into luxury housing. Meanwhile, a plot of land in Chai Wan was yanked off the auction block when it failed to attract bids, reports Bloomberg. The withdrawn property has the obvious drawback of looking out onto a cemetery. Today Sun Hung Kai's shares rose 0.9%. Other real estate firms also made headway with New World Development climbing 1.8% and Henderson Land rising 1.7%.
In China investors were less bullish on property as they await news of new property taxes and other restrictions on real estate investments. China Merchants Property Development sank 1.5% and Citichamp Dartong fell 1.2%. Among the biggies, China Vanke slumped 1%, hitting a two-month low, while Poly Real Estate managed a 1.4% gain.
Chinese mining companies rose steadily today following gains on the London Metal Exchange. Shanghai-listed Aluminum Corp. of China rallied 7.6%, Shandong Nanshan Aluminum gained 2.1% and Shandong Gold Mining rose 1.5%. Among steel companies, Baoshan Iron & Steel increased 1.2% and Maanshan Iron & Steel added 0.9%.
In Japan investors poured money into stocks as they watched the yen fall to a near eight-week low against the euro. Hopes are rising that the Bank of Japan will increase monetary easing efforts. Today Meidensha, which exports electrical construction machinery, surged 4.2% and OKI Electric Industry, which makes semiconductors, ATM machines and computers climbed 2.8%. Fuji Heavy Industries, which in addition to making Subaru cars, also supplies aircraft parts to Boeing, zipped up 5.8% and Ebara, a manufacturer of pneumatic and hydraulic equipment rose 3.2%.
Among popular electronics brands Pioneer shot up 3.4%, Canon surged 1.7%, Casio Computer gained 1.% and Sony advanced 2%.
Meanwhile, Elpida Memory racked up an 8.1% gain after news broke that the company has created the world's smallest memory chips, scheduled to begin shipping in December, offering evidence that Japan is still on the forefront in some areas, even if its economy is foundering.