Asia stocks gain as China manufacturing improves

BANGKOK (AP) -- Asian stock markets were mostly higher Thursday, supported by Congress averting a U.S. government default and a pickup in China's manufacturing in January.

HSBC Bank said its China manufacturing index rose to a two-year high of 51.9 in January from 51.5 in December. A reading above 50 indicates expansion on a scale of 100.

Analysts at Credit Agricole CIB in Hong Kong said before the survey's release that they expected China to beat estimates. "Manufacturing sentiment should have been boosted by previous fiscal measures and optimism towards the new government" following the once in a decade leadership change late last year, the bank said in an email.

Japan's Nikkei 225 index reversed course after three days of losses, rising 1 percent to 10,591.89. Australia's S&P/ASX 200 advanced 0.4 percent to 4,808.50. Benchmarks in Singapore, Thailand, New Zealand and the Philippines also rose.

Hong Kong's Hang Seng lost 0.2 percent to 23,599.33 and mainland Chinese shares also fell. However, analysts said the losses were due to profit-taking after recent rallies, not disappointment with China's manufacturing numbers.

"The stock markets already shot up a lot," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. "It's just some profit-taking."

South Korea's Kospi fell 0.6 percent to 1,968.25 after the Bank of Korea said the country's economy expanded 0.4 percent in the final three months of last year, falling short of the bank's 0.8 percent growth forecast.

Among individual stocks, Sony Corp. rose 1.6 percent. Kyodo News Agency reported the company will release next month a new Walkman headset with enhanced waterproof capabilities to enable swimmers to listen to music.

South Korea's LG Display Co., a supplier of flat screens to Apple Inc., fell 1.6 percent. Apple reported in after-hours trading Wednesday that its sales fell short of forecasts. Mazda Motor Corp. jumped 6.2 percent.

Investors were encouraged by developments in Washington, where the U.S. House of Representatives voted to avert the imminent threat of a government default by suspending the debt limit — the amount of money the government is allowed to borrow.

The law requires that Congress approve raising the amount the government can borrow to pay its obligations as the debt exceeds its limit, currently at $16.4 trillion. That's the cumulative amount the country owes as a result of routinely spending more than it collects in taxes.

On Wednesday, IBM single-handedly lifted the Dow Jones industrial average to a five-year high. The tech giant's quarterly earnings beat Wall Street's expectations, thanks to its lucrative Internet-based "cloud" computing business and sales of software services.

The Dow Jones industrial average rose 0.5 percent to close at 13,799, the highest level since Oct. 31, 2007. The Standard & Poor's 500 index rose 0.2 percent to 1,494.81. The Nasdaq composite rose 0.3 percent to 3,153.67.

Benchmark oil for January was up 24 cents to $95.47 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.45, or 1.5 percent, to finish at $95.23 per barrel, the first decline of more than 1 percent since Dec. 21.

In currencies, the euro fell to $1.3316 from $1.3321 late Wednesday in New York. The dollar rose to 89.16 from 88.66 yen.

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Folllow Pamela Sampson on Twitter at http://twitter.com/pamelasampson