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Market Update

Shanghai Gains in Light Asian Session

Shanghai-listed stocks gained ground Monday after upbeat Chinese data added to market confidence, as investors got their first chance to react to the Federal Reserve's surprise move, last week, to retain its monetary stimulus program.

The Shanghai Composite added 0.8% at 11:30 a.m. local time, opening after a four-day long holiday since September 19th.

But Mumbai and Sydney moved off peaks in a light session. Volumes were thin as markets in Japan remained closed for a public holiday while a storm disrupted trading in Hong Kong.

Mumbai's Sensex slipped 0.7% while Sydney's S&P/ASX All Ordinaries was down 0.6% at the time of writing.

Data released in China showed industry output in the world's second-largest economy expanded for a second time in September. The HSBC flash purchasing managers' index hit a six-month high of 51.2 in September from 50.2 in the previous month.

A reading above 50 indicates expansion in economic activity and vice versa. The final print of purchasing managers index' will be released on September 30th.

In other important news, Germany re-elected Angela Merkel as the Chancellor in Sunday's federal elections. Merkel, however, finished short of an absolute majority as her coalition partners failed to garner enough votes to win seats in the parliament.

Stocks on the Move

Shanghai-listed industrial stocks ticked higher on heels of the upbeat manufacturing output report.

Engineering construction company China Railway Construction gained 0.6% while Baoshan Iron & Steel Co. was up 0.2%.

Metal player Jiangxi Copper tacked on a percent and Aluminum Corp. of China rose 1.7%.

Other resources stocks were also higher. PetroChina, China Petroleum & Chemical Corp improved and Sinopec Shanghai Petrochemical climbed around a percent each.

Miners in Sydney, however, were trading with modest cuts despite the positive Chinese data. China being Australia's largest export market, especially for commodities, any change in Chinese industrial activity has a bearing on Australian miners.

But mining stocks pushed lower in today's trade tracking weakness in global metal prices.

Index leader BHP Billiton was down 0.9% and Rio Tinto eased 0.7% while gold miner Newcrest Mining slumped over 8%.

Banks and oil firms were also listless.

In Mumbai, stocks continued to tread lower after the central bank, on Friday, surprisingly hiked its lending rate by 25 basis points.

Banks were among the top losers with ICICI Bank erasing 3.7% while SBI retreated 3.4%. HDFC Bank lost 3%.

Some auto firms and defensive plays were also on the slide. Maruti Suzuki backtracked 2.4% and Mahindra & Mahindra reversed 1.2%.

Telecom giant Bharti Airtel gave up 3.2%, pharma leader Dr. Reddys Lab moved down 1.3% and FMCG firm Hindustan Unilever eased 1.1%.