Most Asian markets ended higher Monday, as investors encouraged by a higher finish on Wall Street snapped up beaten-down shares, though some narrowed gains toward the close of the session on caution ahead of a slew of economic data and the U.S. presidential election.
The benchmark Hang Seng Index trimmed its gains to 375.7 points, or 2.7% to close at 14,344.4 while Japanese stock markets were closed for a holiday.
The Chinese stock market closed lower, as banks pared early gains after the central bank decided to remove the lending caps imposed at the start of the year and brokerages extended their losses on fresh worries over share supply pressures. The benchmark Shanghai Composite Index closed down 9.0 points or 0.5% at 1,719.8, its lowest level in 25 months, extending Friday's losses.
On the economic front, CLSA reported that the China purchasing manufacturers' index fell to a record low of 45.2 in October on weaker orders and pricing power due to the global financial crisis. The October reading was down from 47.7 in September, its third consecutive monthly decline.
Meanwhile, the People's Bank of China said that it has abandoned the lending caps to help insulate the domestic economy from the global economic turmoil. Li Chao, a spokesman for the central bank, also suggested in a report carried by the official Xinhua news agency that the central bank might reduce interest rates further.
Banks and property developers rose initially, but gave back some of the gains as investors digested the actual impact of the measure on the credit market.
Banks were higher, with Bank of Communications rising 2.8%, Shanghai Pudong Development Bank advancing 1.8%, and Industrial and Commercial Bank of China climbing 1.1%.
Elsewhere in the financial sector, Haitong Securities plunged by the 10% daily limit as about 1.2 billion of its A-shares will come out of lock-up and become tradable later this month. CITIC Securities plmmeted 6.3%, but Ping An Insurance gained 4.3%.
Among property developers, China Vanke added 0.7%.
Airlines were hit by higher oil prices and fears of weak demand. China Eastern Airlines fell 5.8% and Air China dropped 3.4%.
Refiner China Petroleum & Chemical Corp declined 1.2% and index leader PetroChina shed 1.1%.
Shanghai Zhenhua Port Machinery rose 0.8% after the company announced that it expects to book a gain of 517 million yuan from foreign exchange hedging deals next year.
Elsewhere:
Taiwan's Taiex closed up 2.6% at 4,995.
Singapore's STI closed 5.0% at 1,883.
Indonesia's Jakarta Composite Index closed up 7.6% at 1,352.
Malaysia's KLCI closed up 35.7 points at 899.
India's Sensex closed up 5.6% at 10,337.
South Korea's Kospi, which jumped 18.6% in the previous week, jumped as high as 1,158.87 during the session, but gave away some gains toward the close to end at 1,129.08, up 1.4%.
The S&P/ASX 200 index finished 5.1% up at 4,221.50.
with files from other wire services
