Asia-Pacific stocks mixed; official data shows China factory activity unexpectedly contracting in September

SINGAPORE — Shares in Asia-Pacific traded mixed on Thursday morning as investors reacted to the release of Chinese factory activity data for September.

In Japan, the Nikkei 225 slipped 0.31% while the Topix index declined 0.4%. Japan is set for a new prime minister after Fumio Kishida won the governing party leadership election on Wednesday.

South Korea’s Kospi rose fractionally. Over in Australia, the S&P/ASX 200 gained 1.07%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.05% higher.

Data released Thursday showed a contraction in China’s September factory activity, with the official manufacturing Purchasing Managers’ Index for September coming in at 49.6. That was below expectations for a reading of 50.1 by analysts in a Reuters poll.

PMI reading below 50 represent contraction while those above that level signify expansion. PMI readings are sequential and represent month-on-month expansion or contraction.

Looking ahead, the Caixin/Markit manufacturing PMI is set to be out at about 9:45 a.m. HK/SIN.

Investors will also monitor shares of developer China Evergrande, after Reuters reported that some bondholders did not receive a due coupon payment by the close of Asia business hours on Wednesday.

Overnight stateside, the Dow Jones Industrial Average edged 90.73 points higher to 34,390.72 while the S&P 500 gained 0.16% to 4,359.46. The Nasdaq Composite shed 0.24% to 14,512.44.

The moves came as investors continued watching the 10-year Treasury yield, which crossed the 1.5% level on Monday and has since remained above that mark, last sitting at 1.508%. Yields move inversely to prices.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 94.302 following a recent climb from below 94.

The Japanese yen traded at 111.88 per dollar, having weakened from below 111.6 against the greenback yesterday. The Australian dollar changed hands at $0.7191 after falling from above $0.728 earlier this week.

Oil prices were higher in the morning of Asia trading hours, with international benchmark Brent crude futures hovering above the flatline, trading at $78.65 per barrel. U.S. crude futures gained 0.24% to $75.01 per barrel.

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