Asia stocks gain on US manufacturing upswing

Associated Press
Spain's Economy Minister Luis De Guindos, left, and European Commissioner for Economic and Monetary Affairs Olli Rehn attend a press conference after a meeting at the Ministry in Madrid, Monday, Oct. 1, 2012. (AP Photo/Daniel Ochoa De Olza)
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BANGKOK (AP) — Asian stock markets were boosted Tuesday by an upbeat report showing U.S. manufacturing grew in September for the first time in four months.

Hopes that the U.S. economy might be picking up helped push Japan's Nikkei 225 index 0.1 percent higher to 8,807.40.

South Korea's Kospi rose nearly 0.2 percent to 1,999.42 and Australia's S&P/ASX 200 gained 0.8 percent to 4,424.70.

Benchmarks in Singapore, Taiwan and Malaysia also rose. Markets in Hong Kong, mainland China, and India were closed for public holidays.

Investors were emboldened to weigh into stocks after the Institute for Supply Management said Monday its index of U.S. factory activity rose sharply to above 50, a reading that signals growth. The index had been below 50 from June through August.

The increase is a hopeful sign that the economy may be improving after a weak stretch. Economists welcomed the increase, though most still forecast slow economic growth below 2 percent for the rest of this year.

"The rise in the ISM manufacturing index in September, to a four-month high of 51.5 from 49.6 in August, will boost hopes that some of the recent slowdown in economic growth was just a summer phenomenon," Paul Dales of Capital Economics said in a research note.

The better news on manufacturing helped investors set aside concerns of a possible downgrade by credit rating agency Moody's of Spain's debt rating to junk status. The agency has the debt on review and is due to release its findings this week. Any cut in the rating would make Spain's debt non-investment grade.

That would hurt Spanish markets because many pension funds and banks would have to sell them from their portfolios and desist from buying them at auction. That, in turn, would force Spain to pay higher rates to borrow money, further hurting its government finances.

In corporate news, Qantas Airways rose 2.3 percent after selling its 50 percent stake in road freight operator StarTrack to Australia Post and moving to take full ownership of air freight business Australian Air Express.

Japanese exporters rose after the yen slipped against the dollar and the euro. Nintendo Co. rose 3.7 percent, Mazda Motor Corp. added 3.4 percent and Ricoh Co. jumped 4.4 percent.

Wall Street stocks closed mostly higher Monday. The Dow Jones industrial average rose 0.6 percent to close at 13,515.11. The Standard & Poor's 500 index rose 0.3 percent to 1,444.49. The Nasdaq composite fell 0.1 percent to 3,113.53.

Benchmark oil for November delivery was down 17 cents to $92.31 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed up 29 cents at $92.48 in New York on Monday.

In currencies, the euro rose to $1.2898 from $1.2886 in New York late Monday. The dollar rose to 78.09 yen from 78.02 yen.

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