By RTT News, October 03, 2013, 05:16:00 AM EDT
(RTTNews.com) - Asian stocks rose broadly on Thursday even as the U.S. government shutdown entered its third day amid no signs of progress toward ending the budget impasse. Prolonged budget talks, a weaker dollar amid fears of a bigger showdown over raising the nation's debt ceiling and disappointing private-sector jobs data released overnight stocked expectations that the Federal Reserve will go slow on tapering, a move that will help sustain large capital flows to emerging markets.
Investors also cheered a major political victory for Italian Prime Minister Enrico Letta's government in a no confidence vote and positive economic data out of China, which showed that activity in China's service sector expanded at its fastest pace in six months in September.
China's official non-manufacturing purchasing managers' index, which covers services including aviation, real-estate, retail, software, retail and construction sectors, rose to 55.4 in September from 53.9 in the previous month, a survey by the China Federation of Logistics and Purchasing revealed. Hong Kong's Hang Seng added a percent at the close, while the Chinese market remains shut until October 7 for National Day holidays.
Japanese shares ended marginally lower on concerns the ongoing federal government shutdown can seriously harm U.S. economic growth in the fourth quarter. The Nikkei average slipped 0.09 percent to 14,157 and the broader Topix index closed 0.1 percent lower at 1,174. Heavyweight Fast Retailing declined 0.8 percent on reporting a 4.4 percent rise in its September same-store sales at its domestic Uniqlo casual clothing stores. Tokyo Electric Power tumbled 4.8 percent after the company said it has found a fresh leak at a storage tank holding contaminated water at the crippled Fukushima station.
ANA Holdings advanced 2.3 percent on receiving 11 additional takeoff and landing rights at Tokyo'sHaneda airport. Air conditioner maker Daikin Industries jumped 4.8 percent on a Nikkei report that the firm's free cash flow will total around Y50 billion this fiscal year, compared with a negative Y115.2 billion the year before.
Exporter Canon added 2 percent and Olympus climbed 2.5 percent as the dollar gained slightly from the lower 97 yen range to the upper 97 yen range ahead of the Bank of Japan's policy decision. The central bank is forecast to retain its plan to increase the monetary base at an annual pace of JPY 60 to 70 trillion, while maintaining interest rates at 0.10 percent after the end of its policy board meeting on Friday.
Governor Haruhiko Kuroda previously said that he supported the sales tax increase and would respond with fiscal and monetary measures, if the tax hike threatens economic growth.
Australian shares posted modest gains, with firmer commodity prices and encouraging service sector data underpinning sentiment. Australia's service sector activity contracted further in September, but the pace of contraction slowed significantly, according to survey results released by the Australian Industry Group. The headline index rose to 47.1 from the August reading of 39.0. The benchmark S&P/ASX 200 rose 0.4 percent to 5,235.
BHP Billiton closed 0.8 percent higher after the mining giant outlined its productivity agenda to capitalize on the next phase of the Asian growth cycle. Rio Tinto also rose 0.8 percent, while gold miner Newcrest rallied 3.2 percent. The big four banks gained ground, with Westpac rising 0.7 percent, while ANZ, Commonwealth and NAB rose between 0.1 percent and 0.2 percent. Leighton Holdings shares plunged over 10 percent amid allegations the construction giant paid millions of dollars of kickbacks to win contracts in Iraq.
New Zealand shares ended marginally higher, led by gains in retailers. The benchmark NZX-50 inched up 0.03 percent to 4,770, with 20 of its components advancing. Kathmandu Holdings soared over 7 percent, continuing its recent strong run. Hallenstein Glasson Holdings rose 0.4 percent, while Michael Hill International and the Warehouse Group advanced about 1.4 percent each. New Zealand Oil & Gas ended unchanged on its announcement that its 35 percent partner in the Tui oil and gas field, Japan'sMitsui, had quit its stake.
India's Sensex was rallying 1.9 percent, tracking gains in rupee, which strengthened to below 62 levels in early trading, driven by dollar weakness in overseas markets.
Elsewhere, South Korea's stock market was closed for the National Foundation Day. Indonesia's Jakarta Composite index was gaining 0.7 percent, Malaysia's KLSE Composite was rising 0.1 percent and the Taiwan Weighted average rallied 1.7 percent, but Singapore's Straits Times was down 0.2 percent.
U.S. stocks drifted lower overnight as a report from payroll process ADP showing weaker than expected private sector growth in September added to concerns about the economic impact of a prolonged government shutdown and the looming debt ceiling. The Dow slipped 0.4 percent, while the tech-heavy Nasdaq and the S&P 500 dropped about 0.1 percent each.
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