By Daniel Inman
An improving service sector in China helped stocks in Shanghai
-- and the Australian dollar -- move higher Monday, as much of Asia
started the week with small gains.
There were signs of growth in China's services sector, as the
official Non-Manufacturing Purchasing Managers' Index rose to 56.3
in October, according to data released over the weekend. The
measure came out much higher than the 50 mark that separates
expansion from contraction and was the highest reading in 14
months.
The Shanghai Composite rose by 0.2%, and Hong Kong's Hang Seng Index was up 0.1%.
Australia's S&P/ASX 200 nudged 0.1% higher, losing much of
its earlier gains as the session progressed.
With only small moves in stocks, markets were waiting for a
number of potential catalysts. The big event for Asia will be the
upcoming key meeting of China's Communist Party, where the new
leadership is expected to discuss the reform agenda.
In terms of global news, investors are anticipating the U.S.
labor report, out on Friday.
The impact of the Chinese data was more noticeable in
Australia's currency on Monday, which knocked higher early in the
session and received a further boost after local retail sales rose
much more than expected in September. The so-called Aussie (AUDUSD)
was at 94.85 U.S. cents, compared to 94.39 U.S. cents late Friday
in New York.
The next event for the currency will be the Reserve Bank of
Australia's meeting on Tuesday. A dovish speech given last week by
Glenn Stevens, the central bank's governor, raised expectations
that interest rates could be cut again.
Elsewhere in Asia, South Korea's Kospi dropped 0.5%.
In Japan, where stock markets stopped trading Monday for a
public holiday, the yen (USDJPY) was little moved at Yen98.75 to
the dollar.
Earnings season continued in Australia, with Westpac Banking
Corp. (WBK) fell 0.4% after the country's second-largest bank by
market value reported a fiscal-year profit that beat expectations,
as well as issuing a special dividend, though this was offset by a
pre-prevision operating profit that undershot forecasts.
Also in Sydney, Coca-Cola Amatil (CCLAF) dropped 4.1% after
warning that its fiscal-year earnings before interest and tax would
be down between 5% and 7%.
The main earnings announcement for the region on Monday will
likely be HSBC Holdings (HBC). The largest constituent on Hong
Kong's Hang Seng Index is scheduled to announce its latest earnings
after the market closes. The lender's stock was up 0.3% in early
trading.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires