Asian Stock Market News - China'a Factory

Asia's factories struggle with global demand gulf

An employee operates a machine as she works along a production line of a factory producing solar energy products in Shangrao, Jiangxi province, China, October 11, 2015.

Activity in China's colossal factory sector shrank in October as global demand stuttered, reinforcing the case for more stimulus and questioning whether the Federal Reserve can be confident enough to raise U.S. interest rates this year.

A crop of industry surveys out on Monday pointed to another poor month for trade across Asia as activity contracted in South Korea, Taiwan and Malaysia. Only Japan showed any hint of growth, perhaps thanks to the persistent weakness of the yen.

The run of pedestrian results will focus attention on the U.S. Institute for Supply Management (ISM) measure of manufacturing due later Monday which is forecast to have flatlined in October. ECONUS

The U.S. central bank surprised markets last month by downplaying global growth worries while opening the door wide to a rate hike in December.

Those optimists looking for signs of revival in Asia found slim pickings in the latest data.

Activity in China's manufacturing sector unexpectedly contracted in October for a third straight month, according to the official survey out on Sunday.

The Purchasing Managers' Index (PMI) held at 49.8 in October, missing market hopes for a break-even 50.0 reading, while new export orders shrank for the 13th month.

That was followed by the Caixin/Markit China PMI which focuses on small and mid-sized companies. It edged up to 48.3 in October, from 47.2, but still pointed to an eighth month of contraction.

China's woes are being felt among its neighbors. South Korea's exports slumped the most in more than six years in October, with hefty drops in shipments to China, the United States and Europe.

South Korea is the first major exporting economy to report monthly trade data and is home to global suppliers such as Samsung Electronics (005930.KS), Hyundai Motor (005380.KS) and Hyundai Heavy Industries (009540.KS).

The only promising news came from Japan where the Markit/Nikkei PMI hit the highest in a year at 52.4.