* MSCI Asia ex-Japan +0.16%; Nikkei -0.41%
* Caixin PMI shows stronger China factory activity
* Chinese officials doubt long-term trade deal with US -
Bloomberg
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, Nov 1 (Reuters) - Asian shares reversed early
losses on Friday as an unexpected bounce in Chinese
manufacturing activity offset some negativity cast by a
Bloomberg news report that raised doubts over whether the United
States and China can reach a long-term trade deal.
Factory activity in China expanded at its fastest pace in
more than two years in October as export orders and production
rose, a private business survey showed on Friday. The expansion, which beat expectations and contrasted with
the dour results of an official survey Thursday, helped to boost
Chinese blue chips .CSI300 , which rose 0.7%.
Hong Kong's Hang Seng .HSI added 0.3% and Seoul's Kospi
.KS11 rose 0.42%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS reversed early losses to add 0.16%, having hit
three-month highs on Thursday.
The index's performance reflected a results season that has
shown companies to be more resilient than expected, said Jim
McCafferty, head of Equity Research, Asia ex-Japan at Nomura.
"If you look at the micro data supplied by the companies,
then it tells you that customers ... are continuing to do
business. So I think that we are in a better state than perhaps
investors thought we were just one month ago," he said.
Earlier on Friday, losses had mirrored falls in global stock
markets, as MSCI's gauge of equity performance in 47 countries
.MIWD00000PUS fell from 20-month highs after a report that
cast doubt on the likelihood of a U.S.-China trade deal.
On Wall Street, the Dow Jones Industrial Average .DJI fell
0.52%, the S&P 500 .SPX lost 0.30% and the Nasdaq Composite
.IXIC dropped 0.14%.
Efforts by Washington and Beijing to end their bruising
nearly 16-month trade war appeared on track as U.S. President
Donald Trump said on Thursday said that the two sides would soon
announce a new venue for the signing of a "Phase One" trade deal
after Chile cancelled a planned summit set for mid-November.
Optimism was dampened by a Bloomberg report citing unnamed
Chinese officials airing doubts over whether a comprehensive
long-term trade deal is possible. China's doubts were "not entirely unexpected", Greg McKenna,
strategist at McKenna Macro, said in a morning note to clients,
noting that the falls in equity markets were relatively small.
Retreats in the S&P 500 and the U.S. 10-year Treasury yield
indicated some technical resistance in the market, he said.
"Either way, today's deluge of manufacturing PMI's and then
U.S. non-farm (payrolls) tonight will be an important factor in
where markets head next," McKenna said.
The Institute for Supply Management is due to release data
from its survey of purchasing managers on Friday. A separate PMI
survey released Thursday by the Chicago Fed USCPMI=ECI showed
a sharper contraction in midwestern manufacturing activity for
October.
The yield on benchmark 10-year Treasury notes US10YT=RR
was higher at 1.6962% compared with its U.S. close of 1.691% on
Thursday. The two-year yield US2YT=RR , sensitive to market
expectations of Federal Reserve policy, was at 1.5319%, up from
a U.S. close of 1.526%.
The Fed cut interest rates for a third time this year on
Wednesday to help sustain U.S. growth, but signalled there would
be no further reductions unless the economy takes a turn for the
worse. In the currency market, the dollar was a touch stronger than
the safe-haven yen, adding 0.01% to 108.03 JPY= .
The euro EUR= was 0.14% higher on the day at $1.1166,
while the dollar index .DXY , which tracks the greenback
against a basket of six major rivals, was down 0.14% at 97.216
on the day.
U.S. crude CLc1 ticked up 0.33% to $54.36 a barrel and
Brent crude LCOc1 rose 0.13% to $59.70 per barrel.
Spot gold XAU= eased 0.15% to $1,510.94 per ounce. GOL/