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Market Update

Asian Markets Rise; China Data, Fed in Focus

Asian markets were trading higher Thursday boosted by better-than-expected Chinese factory data and after the U.S. Federal Reserve hinted it would continue its monetary stimulus measures over the near term.

Japan's Nikkei bounced back after yesterday's slide, gaining 1.7% on the back of a weaker yen. The Shanghai Composite added 0.9%, the Hang Seng rose 0.6% and the S&P/ASX All Ordinaries edged up 0.2%. Mumbai's Sensex rallied 1% at 10:00 a.m. local time.

Data showed China's official manufacturing purchasing managers' index rose unexpectedly to 50.3 in July from 50.1 in June. The reading, however, came in stark contrast to that published by HSBC, which said manufacturing activity in the country sank to an 11-month low of 47.7 in July from a final print of 48.2 in the previous month. A reading above 50 indicates expansion in the economy and vice versa.

Investors, however, chose to focus on the official PMI data.

Meanwhile, the U.S. Federal Reserve added to the optimism after the central bank said it would maintain its current bond-purchase program. Although the officials gave no clear indication as to when they will begin tapering the program, they said that a highly accomodative stance of monetary policy would remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.

Stocks on the Move

Exporters in Tokyo gained ground as the yen softened against its major peers and after a few upbeat earnings spurred investor interest.

Panasonic Corp. bounced 5.5% after it reported better-than-estimated first quarter profit. Toshiba Corp. said it swung back to profit in the first quarter, but shares plunged 4% as results missed analysts' estimates.

Financials were also on the higher side after the Nikkei reported net profit at five megabanks surged 56% in the April-June quarter. Mizuho Financial Group rose 4.4% and Mitsubishi UFJ Financial gained 3.3%.

Realty players and pharma stocks added to the gains. Mitsui Fudosan rallied 3.6% while Mitsubishi Estate was up 3.3%. Drug maker Takeda Pharmaceuticals enhanced over 4% while Astellas Pharma tacked on a percent.

In Hong Kong, metal players were in the forefront after the upbeat official PMI data. Angang Steel rose 4.4% and Aluminum Corp. of China climbed 1.3%.

Shanghai-listed Baoshan Iron & Steel Co. edged up 0.5% despite reports the government intends to slash the nation's steel output to curb overcapacity.

Among oil stocks, PetroChina climbed 1.2% and CNOOC added a percent.

Globally-exposed stocks were also trading modestly higher. Esprit Holdings and Li & Fung both added over 3% each while Belle International Holdings added 1.1%.

Mumbai-listed stocks trended higher in lockstep with their Asian counterparts. Top gainers included HDFC (+3.1%), Hindustan Unilever (+2.9%), HDFC Bank (+2.6%), Gail India (+2.5%) and NTPC (+1.8%).

In Sydney, miners were slightly higher following Chinese industrial data but banking stocks offset most of these gains.

ANZ tumbled over 2%, NAB erased 1.7% while Westpac Banking slipped 0.5%.

Among miners, BHP Billiton added 1%, Rio Tinto edged up 0.4% while Fortescue Metals Group inched up 0.3%.