Asia business sentiment drops, India optimistic but China, SKorea in dumps

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Some of the weakest readings came from China, South Korea and Taiwan, and Singapore, according to a business sentiment survey. (Reuters) Some of the weakest readings came from China, South Korea and Taiwan, and Singapore, according to a business sentiment survey. (Reuters)
SummaryOptimism returns to India, lifting its sentiment index higher at 67 after a drop in last quarter.

China may have avoided a sharp slowdown.

"We do know that Europe continues to struggle and there was a soft patch a few months ago in China," said Craig James, chief economist at Commonwealth Securities in Sydney. "There's also the fact that while there's a recovery underway in the United States, it's somewhat patchy.

"So I think the export-orientated economies are basically suffering as a result of that," James said. "The good news is more recent data seems to suggest a little bit more momentum returning to some of the major economies and regions but there is a lag in effect."

As recently as a month ago, investors were worried that China's economy was slipping into a deeper-than-expected downturn. But policymakers have stepped in with measures to steady the economy, from quicker railway investment and public housing construction to introducing policies to help smaller companies with financing needs.

The survey showed that business confidence was steady in Japan at 63, its highest point since June 2010 among the 20 companies surveyed, which included Canon Inc and pharmaceutical firm Daiichi Sankyo.

"If we look at forward-looking indicators, we do see quite solid evidence showing that the global growth recovery should be providing support for an improved growth outlook for Asia," said Fan from Credit Suisse.

Companies in Indonesia were the most negative with a reading of 25, a sharp drop from its second-quarter reading of 100 when it was one of the most positive.

Indonesian companies are seeing an increase in their borrowing costs, with the central bank's surprise hike in interest rates last week. Wallowing near a 4-1/2-year-low, the Indonesian rupiah is the worst performer in Asia this year among currencies, having lost around 16 percent against the dollar.

However, there are some bright spots in Southeast Asia. The Philippines was the most positive economy with a reading of 100 - the only economy with a top score - compared to its reading of 94 in the second quarter. Australia was the second-most positive with a reading of 79, up from 75.

HIGHLIGHTS - by economy

SYDNEY (Reuters) - Asia's top companies were less upbeat about their business outlook in the third quarter of 2013 as concerns about the global economy and rising costs dampened sentiment, the latest Thomson Reuters/INSEAD Asia Business Sentiment Survey published on Wednesday showed.

Global uncertainty on when the U.S. Federal Reserve will taper its $85 billion bond buying program and geopolitical tensions in Syria have

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