Asian shares at fresh three-month highs on China PMI surprise

By Andrew Galbraith

SHANGHAI (Reuters) – Asian shares scaled three-month highs on Friday as a surprise bounce in Chinese manufacturing activity eclipsed doubts raised by a Bloomberg news report over whether the United States and China can reach a long-term trade deal.

Shares in Europe were set to follow Asia’s lead. Pan-region Euro Stoxx 50 futures () were up 0.28%, German DAX futures () gained 0.34% and futures () added 0.19%.

Factory activity in China expanded at its fastest pace in more than two years in October as export orders and production rose, a private business survey showed on Friday.

The expansion, which beat expectations and contrasted with the dour results of an official survey Thursday, helped to boost Chinese blue chips (), which surged 1.6%.

Hong Kong’s Hang Seng () added 0.65% and Seoul’s Kospi () rose 0.77%. The Nikkei () underperformed, ending the day down 0.33%.

MSCI’s broadest index of Asia-Pacific shares outside Japan () reversed early losses to touch fresh three-month highs, and was last up 0.4%.

The index’s performance reflected a results season that has shown companies to be more resilient than expected, said Jim McCafferty, head of Equity Research, Asia ex-Japan at Nomura.

“If you look at the micro data supplied by the companies, then it tells you that customers … are continuing to do business. So I think that we are in a better state than perhaps investors thought we were just one month ago,” he said.

Earlier on Friday, losses had mirrored falls in global stock markets, as MSCI’s gauge of equity performance in 47 countries () fell from 20-month highs after a report that cast doubt on the likelihood of a U.S.-China trade deal.

On Wall Street, the Dow Jones Industrial Average () fell 0.52%, the S&P 500 () lost 0.30%

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