Asian stocks take breather after previous surge

Hong Kong - Asian markets were mixed on Monday as traders took a breather after last week's rally, but Shanghai hit a 21-month high on hopes of Chinese stimulus measures after a weak manufacturing report.

Wall Street Friday had provided a healthy lead, with the Dow and S&P 500 reaching new highs after Japan's central bank said it would ramp up its own stimulus programme to kickstart growth.

The dollar held on to Friday's gains against the yen, sitting at seven-year highs. Friday's news came days after the US Federal Reserve ended its own stimulus.

Sydney eased 0.36% to 5 506.9, while Seoul dropped 0.58% to close at 1 952.97.

Hong Kong ended 0.34% lower, dipping 82.09 points to 23 915.97. But Shanghai closed 0.41% higher, adding 9.85 points to 2 430.03, its highest since February last year.

Tokyo was shut for a public holiday.

Global markets and the dollar surged on Friday after the Bank of Japan said it would widen its asset-purchasing scheme to boost lending and try to avoid a recession.

After a jump in Asian shares, including a near-five percent rise in Tokyo, Wall Street powered ahead.

The Dow leapt 1.13% and the S&P 500 added 1.17% - both hitting all-time highs - while the Nasdaq gained 1.41%.

However, dealers took a breather for the first day of November trade, with profit-takers moving in.

China at the weekend released an index of manufacturing activity that showed growth slowed in October, the latest data indicating the world's second-largest economy slowing down.

The official purchasing managers' index (PMI) came in at 50.8 last month, the National Bureau of Statistics said, lower than 51.1 in September. Readings above 50 indicate growth while anything below points to contraction.

PMI tracks activity in China's factories and workshops and is a closely-watched indicator of the health of the economy.

On Monday a separate report by HSBC came in a 50.4, the strongest result since July.

"Overall, the manufacturing sector continued to stabilise in October, however the sequential momentum likely weakened," said HSBC. "The economy still shows clear signs of insufficient effective demand."

The figures have raised hopes that Beijing will introduce new economy-boosting measures, with some analysts suggesting officials will cut the amount of cash banks must keep in reserve in order to boosting lending.

"More new infrastructure projects and continuous monetary easing might improve manufacturing for the coming months," Haitong Securities said, according to Dow Jones Newswires.

On currency markets the dollar bought ¥112.76 - its highest since December 2007 - against ¥112.25 on Friday in New York.

The euro was at $1.2489 and ¥140.85 compared with $1.2525 and ¥140.71.

Oil prices were mixed. US benchmark West Texas Intermediate for December delivery fell 39 cents to $80.15, while Brent crude was down 53c at $85.33.

The price of gold fell to $1 172.85 an ounce from $1 173.87 late on Friday.

In other markets:

- Taipei rose 0.34% to 9 004.86.

Taiwan Semiconductor Manufacturing closed 0.38% higher at Tw$131.0, while Hon Hai Precision Industry gained 2.19% to Tw$98.1.

- Wellington climbed 0.56% to 5 418.22.

Genesis Energy surged 2.99% to NZ$2.07 and Air New Zealand was steady at NZ$2.01.

- Manila ended 1.35% higher, adding 97.12 points to 7 312.85.

GT Capital Holdings gained 1.39% to 1 024 pesos while Philippine Long Distance Telephone rose 4.42% to 3 262 pesos.

- Jakarta closed flat, edging down 4.04 points to 5 085.51.

Carmaker Astra International rose 1.48% to 6 875 rupiah, while state miner Aneka Tambang lost 2.58% to 945 rupiah.

- Kuala Lumpur ended flat at 1 853.34.

Public Bank shed 0.3% to 18.48 ringgit, while budget carrier AirAsia gained 2.4% to 2.56 ringgit.

- Singapore closed 0.51% higher at 3 290.84.

DBS Bank advanced 1.84% to end at Sg$18.82 and Singapore Telecom added 0.53% to finish at Sg$3.80.

- Bangkok closed down 0.31% to 1 579.18.

Coal producer Banpu dropped 2.65% to 27.50 baht, while supermarket operator Big C Supercenter gained 3.43% to 241.00 baht.

- Mumbai ended little changed at 27 860.38.

Gail India fell 5.70% to 499.00 rupees, while Sesa Sterlite gained 2.17% to 261.30 rupees.