Asian stocks higher following strong China data

PHOTO: Asian stocks higher following strong China data

HONG KONG - Asian shares rallied on Monday after strong manufacturing data indicated a slowdown in China may be coming to an end, while the dollar climbed back towards the 100 yen mark.

Easing concerns about a possible military strike on Syria also lifted sentiment and reduced worries over crude supplies, sending prices lower.

In early trade Hong Kong added 1.83 per cent and Shanghai rose 0.40 per cent, while Tokyo added 0.81 per cent, Sydney climbed 0.94 per cent and Seoul was flat.

Data Saturday showed China's official purchasing managers' index (PMI) of manufacturing hit 51.0 last month, up from 50.3 in July and the best reading since April last year. Anything above 50 indicates growth, while anything below signals contraction.

On Monday HSBC confirmed its own PMI came in at 50.1.

The results follow a slew of recent upbeat data that suggest a slowdown in the world's number two economy and key driver of global growth may have come to an end.

China's gross domestic product grew 7.8 per cent in 2012, the weakest since 1999, while growth in January-March dipped to 7.7 per cent from 7.9 per cent in the previous three months.

And in the April-June quarter the figure slowed to 7.5 per cent, fuelling concerns of a knock-on effect on the global economy.

However, the latest news suggests government measures to jolt the economy back into action are beginning to have an impact.

It also provides some much-needed support to regional markets after last month's massive sell-off - particularly among emerging markets - caused by fears the US Federal Reserve will soon start to wind down its stimulus programme.

In forex trade the dollar climbed to 98.44 yen (S$1.276) from 98.16 yen on Friday in New York, having sunk to below 97 yen at one point last week.

The euro bought $1.3200 (S$1.68) and 130.05 yen compared with $1.3218 and 129.82 yen. Buying was also helped by lower expectations of a US-led attack on Syria after the Middle Eastern country's alleged chemical attack on its own civilians last month.

Global shares and currencies were hammered last week as dealers bet on a targeted strike, which they feared would spark a wider regional conflict.

However, Britain's parliament rejected such a move last week, while on Saturday US President Barack Obama broke with decades of precedent to say he would seek approval from Congress for action, meaning nothing was likely to happen imminently.

On oil markets New York's main contract, West Texas Intermediate for delivery in October, fell $1.55 to $106.10 a barrel, while Brent North Sea crude for October eased $1.26 to $112.75.

Gold cost $1,390.40 an ounce at 0220 GMT, down from $1,395.50 late Friday.