Beijing — Asia’s largest economies posted strong factory activity in October, although poor showings in Korea and Southeast Asia and a weaker inflation outlook from the Bank of Japan (BoJ) kept market reaction muted. China’s official purchasing managers index (PMI) expanded at the fastest pace in more than two years in October, adding to views that the world’s second-largest economy is stabilising thanks to a credit and housing boom. Indian factory activity grew at the fastest rate since December 2014, boosted by a surge in output and new orders, as Asia’s third-largest economy continues to grow at a robust pace. But investors remained cautious as the prospects of another US Federal Reserve interest rate hike in December raise concerns about the effect on emerging-market economies, despite positive trends in Asia. "Asia is especially exposed to a potential rate hike by the Fed: the region’s highly indebted economies will feel the pinch from rising dollar funding costs but will not r...
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