By Daniel Inman
An improving service sector in China, along with strong local
retail sales helped Australian stocks move higher early Monday,
while South Korean stocks started the week lower.
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 data provided support to the Australian dollar (AUDUSD)
early on Monday, and the currency received a further boost after
local retail sales rose much more than expected in September. The
so-called Aussie was at 94.82 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.
Australian stocks were also helped by the retail sales data,
with the S&P/ASX 200 adding 0.3%.
South Korea's Kospi , however, dropped 0.7%.
In Japan, where stock markets stopped trading Monday for a
public holiday, the yen (USDJPY) was steady at Yen98.70 to the
dollar.
Earnings season continued in Australia, with Westpac Banking
Corp. (WBK) up just 0.1% 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 4.2% 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.
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