Singapore, March 1 (BNA): Asian stocks rebounded from their lowest levels in two months and headed for their best day in seven weeks on Wednesday, as data showed that manufacturing activity in China expanded at the fastest pace in more than a decade. In the gloomy markets yet.
China’s official manufacturing PMI settled at 52.6 last month versus 50.1 in January and was ahead of analysts’ expectations of 50.5, giving investors hope that China’s recovery can offset the global slowdown.
MSCI’s broadest index of Asia-Pacific shares jumped 1.5%, leaving behind a two-month low it hit in early trading hours, before the data was released.
Hong Kong’s Hang Seng rose 3.2%, with developers and consumer technology stocks advancing and only two stocks retreating. Chinese stocks also got a boost, with China’s CSI 300 index jumping more than 1%.
Japan’s Nikkei rose 0.2% and S&P 500 futures gave up early losses to trade flat. European futures rose 0.1%.
“This time the Chinese PMI data for February has taken on more importance due to the usual lack of hard data for January/February until later in the month,” said Alvin Tan, Head of Asia Currency Strategy at RBC Capital Markets.
“China’s February official PMIs and Caixin’s manufacturing PMI surprised strongly to the upside, and markedly higher than the previous January numbers.”
In the currency markets, the dollar’s gains in February seemed to be running out of steam and Asian currencies advanced on the strength of Chinese data even as economic updates from India, Australia and South Korea weakened.
The Chinese yuan rose about 0.4% – the highest level in more than a month – to 6.9063 per dollar. The Australian dollar reversed losses after weaker-than-expected Australian growth and inflation numbers, rising 0.3% to $0.6751.
The New Zealand dollar, which fell about 4% last month, rebounded from its 200-day moving average and rose 0.5% to $0.6217. The yen settled at 136.35.
Keeping gains in check was concern about interest rates staying higher for longer in advanced economies, which was behind a shaky February in stock and bond markets.
The next influx of economic indicators is likely to be crucial as markets gauge whether future interest rate hikes are being adequately priced in now.
Higher-than-expected inflation readings in Europe overnight prompted bond selling, before an unexpected drop in US confidence numbers offered a glimmer of hope that rate hikes are hurting and may be close to peaking.
Two-year Treasury yields, a guide to short-term US interest rate expectations, are close to a four-month high, but at 4.8347%, below the November peak of 4.8830%. The record 10-year yield was 3.9396% in Asia.
Commodities rose as China hopes for demand, Brent crude futures rose 0.6% to $83.94 a barrel.
Rial