Asian stocks higher as 2011 trading opens

HONG KONG — Asian stock markets were higher on the first trading day of 2011, with investor confidence boosted by signs that China's efforts at keeping a lid on inflation may be working. Hong Kong's Hang Seng index rose 1.4 percent to 23,354.18, while South Korea's Kospi rose 0.7 percent to 2,066.17. A monthly survey released over the weekend indicated that manufacturing in China slipped for the first time in five months. The state-affiliated China Federation of Logistics and Purchasing said that its purchasing managers index, or PMI, dipped in December, though it was still the 22nd month of expansion. That eased investor fears that authorities would take further steps to cool inflation, including by raising interest rates further, which could hurt economic growth. "It may indicate that the mainland government may not need to further tighten monetary policy because it is already slowing down," said Kenny Tang, an executive director at Redford Asset Management. Tang said fund managers returning from the holidays are also "reshuffling their portfolios to buy the lagging markets." Benchmarks in Taiwan, Singapore and India also posted gains. Markets in Japan, Australia, New Zealand and mainland China were closed for the New Year's holiday. In New York on Friday, major stock indexes traded in narrow ranges on the last day of 2010. The Dow Jones industrial average rose 7.8 points to 11,577.5, the S&P 500 fell less than a point to 1,257.64 and the Nasdaq composite fell 10.1 to 2,652.87. For 2010, each index returned double-digit gains. In currencies, the dollar rose 0.4 percent against the yen to 81.24. The euro fell 0.6 percent to 1.3295. Benchmark oil for February delivery rose 32 cents to 91.70 in electronic trading on the New York Mercantile Exchange. The contract rose $1.54 on Friday to end the year at $91.38 per barrel. — AP