GLOBAL ECONOMY-China and India lead way in Asia, UK perks up

* Shares rise on strong Chinese manufacturing surveys

* Indian PMI survey also robust

* UK industry growth picks up pace for 1st time since March

* U.S. figures due with crunch Fed decision looming

(Adds UK survey, quotes, details)

By Simon Rabinovitch and David Milliken

BEIJING/LONDON, Nov 1 (BestGrowthStock) – Manufacturing growth in
China and India powered ahead last month and UK industry also
picked up steam, data showed on Monday, countering sluggishness
in the U.S. economy and a faltering Japanese recovery.

Two surveys of Chinese executives showed broad-based
strength in the manufacturing sector of the world’s
second-largest economy and helped boost Asian shares outside
Japan (.MIAPJ0000PUS: ) by two percent. [MKTS/GLOB]

The official purchasing managers’ index (PMI) rose to a
six-month high in October of 54.7 from 53.8 in September, easily
beating market forecasts of 52.9.

A figure above 50 denotes expansion; a reading below 50
indicates contraction. [ID:nTOE6A001P]

Equivalent surveys from Europe are due on Tuesday but
Britain’s PMI showed manufacturing growth picked up pace last
month for the first time since March.

Flash October figures for Germany, released last month, also
gave a strong reading although much of Europe remains mired in
debt and poised to cut public spending to deal with it — a move
that will crimp economic growth going forward.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global manufacturing PMI graphic: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The unexpected rise in Britain’s index to 54.9 will increase
doubts that the Bank of England will soon embark on more
quantitative easing. It followed official data last week that
showed the UK economy grew a surprisingly strong 0.8 percent in
the third quarter from the second. [ID:nSLATLE6GM]

Investors are in little doubt, however, that the Federal
Reserve, which holds a policy meeting on Tuesday and Wednesday,
is poised to inject more money into a struggling U.S. economy.

The United States reported on Friday that its economy grew
at a tepid 2.0 percent annualised rate in the third quarter,
reinforcing expectations the Fed will agree this week to embark
on a new programme of bond purchases. [ID:nN28207235]

U.S. October ISM data — which match the PMIs — is due
later in the day and forecast to edge down.

“Quantitative easing is what the market’s focused on.
That’ll lift all boats,” said James Holt, a Sydney-based
investment specialist at BlackRock, the world’s biggest fund


Manufacturing in India — Asia’s other emerging powerhouse
— put in a performance every bit as strong as China’s.

The HSBC Markit PMI for India, Asia’s third-largest economy,
rose to 57.2 in October from 55.1 in September.

“The manufacturing sector remains supported by strong local
consumption growth, and growing employment suggests that
domestic demand will remain robust,” Frederic Neumann, co-head
of Asian Economics Research at HSBC, said. [ID:nBMA008748]

The strength of China’s official PMI was especially striking
because the index normally heads down in October, said Yu Song
and Helen Qiao, economists at Goldman Sachs.

“The fact that the PMI went up despite this seasonal bias
suggests real activity growth was likely to have been
exceedingly strong in October,” they said in a note.

The survey showed manufacturers continued to run down stocks
last month to meet rising domestic orders. “These readings bode
well for a recovery of output in coming months,” Ting Lu at Bank
of America Merrill Lynch told clients.

A companion PMI produced by Markit for HSBC painted a
similar picture, rising to 54.8 from 52.9 — one of the largest
month-on-month rises in the history of the survey.

Calling the official PMI one of the best leading indicators
of the economy, Lu said the October report supported his
forecast of 9.3 percent year-on-year growth in gross domestic
product in the fourth quarter and 10.3 percent for all of 2010.


Not all the economic news from Asia was upbeat.

The South Korean manufacturing sector shrank for the second
month in a row as the HSBC/Markit PMI fell to 46.75 in October,
the lowest since February 2009, from 48.8 in September.

New export orders also fell below the boom-bust line of 50
for the first time since February 2009. [ID:nSUL000180]

But actual exports from Asia’s fourth-largest economy rose
29.9 percent in October from the same month last year.

“It bodes well for the economy and solid overseas demand
will continue to be a major driver for economic growth,” said So
Jae-yong, an economist at Hana Daetoo Securities in Seoul.

South Korea’s PMI mirrored that for Japan, released last
Friday, which showed manufacturing contracted for a second
consecutive month as slowing demand and a rising yen led to the
first drop in export orders in more than a year.
(Writing by Alan Wheatley and Mike Peacock; Editing by
Catherine Evans)

GLOBAL ECONOMY-China and India lead way in Asia, UK perks up