Asian markets mixed as US businesses caution against tariffs

SINGAPORE — Asian markets were mixed on Wednesday as traders mulled over the impact of tariffs on corporate America, after big industrial companies admitted that they were facing rising costs.

KEEPING SCORE: Japan's Nikkei 225 index jumped 0.8 percent to 22,178.40 as a private survey suggested a recovery in manufacturing in October. The Shanghai Composite index, which closed more than 2 percent lower on Tuesday, jumped 0.6 percent to 2,609.79. Hong Kong's Hang Seng index was flat at 25,347.78 and the Kospi in South Korea dropped 0.3 percent to 2,100.71. Australia's S&P-ASX 200 lost 0.2 percent to 5,829.00. Shares were lower across the region apart from in Singapore.

WALL STREET: U.S. indexes fell on Tuesday following a broad sell-off on softening growth in China and fears that tariff hikes are beginning to hurt corporate earnings. The S&P 500 index suffered its fifth-straight loss, dropping 0.6 percent to 2,740.69. The Dow Jones Industrial Average shed 0.5 percent to 25,191.43 and the Nasdaq composite fell 0.4 percent to 7,437.54. The Russell 2000 index of smaller-company stocks was 0.8 percent lower at 1,526.59.

U.S. EARNINGS: Sentiment was dampened as large U.S. companies kicked off a busy earnings week with warnings of rising costs related to tariffs. Heavy equipment maker Caterpillar posted a larger profit and revenue than expected in the third quarter. But the company said Trump's taxes on imported steel were driving up production costs, causing its shares to slip 7.6 percent to $118.98. 3M, the maker of Post-it notes and ceramic coatings, reported disappointing revenues and said it anticipates about $100 million in extra costs next year. That sent its shares tumbling 4.4 percent. The U.S. and China are locked in a trade dispute over technology and have raised tariffs on billions of dollars of each other's goods.

ANALYST'S TAKE: "The likes of Caterpillar Inc. and 3M Co. were seen undermining market confidence with the forecasts of weaker earnings ahead and reminders of rising costs amid the escalating trade tensions," Jingyi Pan of IG said in a market commentary.

JAPAN FACTORY OUTLOOK: A rise in the preliminary, or "flash" purchasing manager's index, to 53.1 in October from 52.5 the month before raised hopes that recent sluggishness in manufacturing demand may have been transient. A revival in new export orders, to 51.7, a seven-month high, was viewed as especially good news given concerns over China-U.S. trade tensions. Readings above 50 in the survey indicate expansion. Joe Hayes, an economist at IHS Markit, which compiles the survey, said it "indicated stronger expansions in all the key barometers of macroeconomic health".

ENERGY: Oil futures rose after the opening of a high-profile investment conference in Saudi Arabia, amid controversy surrounding the killing of a dissident journalist. Benchmark U.S. crude added 11 cents to $66.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 7 cents to settle at $66.43 a barrel in New York. Brent crude, used to price international oils, gained 29 cents to $76.73 per barrel. In the previous session, it dropped $3.39 to $76.44 a barrel.

CURRENCIES: The dollar strengthened to 112.56 yen from 112.42 yen on Tuesday. The euro eased to $1.1456 from $1.1473.

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