China data pushes most major Asian markets higher

Hong Kong led most major Asian markets higher Tuesday, with data indicating forecast-beating growth in Chinese factory activity providing a boost but uncertainty over the US presidential race keeping investors on edge.

The closely watched purchasing managers' index hit its highest level in more than two years, Beijing said, indicating that the important manufacturing sector -- and the world's number two economy -- is levelling out.

A separate private index also beat expectations to hit its highest mark since July 2014.

The figures come weeks after official data showed economic growth stabilising and putting the government on track to achieve its annual target, while another reading showed a first increase in factory gate prices for four years.

"The market has turned more positive and confident that China’s economy will stabilise in the fourth quarter," Linus Yip, a Hong Kong-based strategist at First Shanghai Securities, told Bloomberg News.

"After a correction in Hong Kong and being at a relatively low level, the market needed some stimulus to gain power and the China figures helped trigger that."

Hong Kong stocks closed up 0.9 percent, having retreated almost three percent in the previous five days. Shanghai ended up 0.7 percent and Tokyo reversed early losses to end 0.1 percent higher.

Singapore put on 0.4 percent in late trade.

But Sydney shed 0.5 percent and Seoul was slightly lower while Wellington and Taipei also finished lower.

In early European trade London added 0.4 percent while Paris and Frankfurt each put on 0.6 percent.

Confidence is still fragile after Friday's bombshell news that with just under two weeks to the election, the FBI was investigating additional emails connected to Democratic nominee Hillary Clinton, Wall Street's preferred candidate.

"There is a lot of uncertainty,” Tony Farnham, a Sydney-based strategist at Patersons Securities, said. “There's plenty happening over the next week and there’s a degree of caution around the key events."

- Japan inflation timeline -

However, the Mexican peso strengthened against the dollar, having tumbled Friday on the FBI news. Clinton's rival Donald Trump has promised to tear up a trade deal between the two countries and build a wall on their border.

In Asian trade the dollar bought 18.86 pesos compared with 18.96 pesos the day before.

The dollar edged up later in the day against the yen after the Bank of Japan once again pushed back its inflation timeline. The central bank now expects prices to move "toward" two percent by March 2019 -- four years later than its original goal, which was set by governor Haruhiko Kuroda in 2013.

Analysts said the move could mean the BoJ will hold off new easing until late next year to give prices time to pick up.

The pound rose against the dollar, having enjoyed a rare bump after Bank of England governor Mark Carney said he would extend his tenure by another year, putting an end to speculation over his future.

Sterling ended Monday at $1.2242, one cent up from earlier in the day. On Tuesday in Asia it fetched $1.2272.

Investors were also keeping an eye on a string of possible market-moving events this week, including gatherings of the Federal Reserve and Bank of England.

The end of the week will also see the release US jobs figures, which will provide a better idea about the Fed's plans for interest rates.

Oil prices made mild gains, having been hammered again Monday on worries about the chances of the success of OPEC's agreement in September to cut output, following the failure last week to agree details.

The commodity saw some support from news of a fire and explosion in Alabama that disrupted operations of the largest gasoline pipeline in the United States.

- Key figures at 0800 GMT -

Tokyo - Nikkei 225: UP 0.1 percent at 17,442.40 (close)

Hong Kong - Hang Seng: UP 0.9 percent at 23,147.07 (close)

Shanghai - Composite: UP 0.7 percent at 3,122.20 (close)

London - FTSE 100: UP 0.4 percent at 6,980.14

Euro/dollar: UP at $1.0987 from $1.0981 Friday

Dollar/yen: UP at 105.00 from 104.82

Pound/dollar: UP at $1.2272 from $1.2242

Euro/pound: DOWN at 89.52 pence from 89.70 pence

Oil - West Texas Intermediate: UP 13 cents at $46.99 per barrel

Oil - Brent North Sea: UP 40 cents at $49.01

New York - Dow: DOWN 0.1 percent at 18,142.42 (close)

Source: AFP