Asian stocks climb further after Europe, China data
Asian shares on Tuesday extended their gains and the dollar pushed back towards 100 yen after strong manufacturing data in China and Europe pointed to an uptick in the global economy.
Stocks in emerging economies also enjoyed small rises after a painful August that saw a huge global sell-off, while easing fears of an imminent strike on Syria helped push oil prices down further.
Tokyo rose 2.54 per cent by the break as the yen weakened against the dollar, Hong Kong added 1.12 per cent, Sydney was 0.19 per cent higher, while Shanghai gained 0.70 per cent and Seoul put on 0.50 per cent.
US markets were closed on Monday for the Labor Day holiday.
September trade started strongly in Asia Monday after China’s official purchasing managers index (PMI) of manufacturing activity came in at a 16-month high in August.
The upbeat numbers add to recent figures indicating a painful slowdown in the world’s number two economy and key driver of global growth may be coming to an end.
Hours later, figures by Markit Economics showed the PMI for the eurozone jumped to a 26-month high of 51.4 points in August from 50.3 in July. A figure above 50 indicates growth while anything below points to contraction.
The European PMI also follow recent data that have raised hopes the region’s drawn-out recession may be in the past
London’s FTSE 100 jumped 1.45 per cent, the DAX 30 in Frankfurt climbed 1.74 per cent and the CAC 40 in Paris added 1.84 per cent.
Currency investors were confident enough to move into higher-yielding, higher-risk units, sending the yen lower.
In morning trade, the dollar rose to 99.57 yen from 99.34 yen in London late Monday. The greenback dived below the 96-yen level last week because of jitters over Syria.
The euro changed hands at US$1.3187, against US$1.3193, while the single currency stood at 131.31 yen compared with 131.11 yen.
Crude prices eased further on Tuesday as worries about supply receded after US President Barack Obama said he would ask Congress to approve a military strike on Syria. The announcement means any attack is unlikely in the immediate future.
In Asian trade, New York’s main contract, West Texas Intermediate for delivery in October, was down 76 cents to US$106.89 a barrel, while Brent North Sea crude for October fell four cents to US$114.29.
Both contracts peaked at multi-month highs and global shares slumped last week as traders bet on US-led action that they fear could spill over in the wider Middle Eastern region.
Among emerging markets, Manila gained 0.21 per cent, Kuala Lumpur added 0.41 per cent and Jakarta was up 0.45 per cent, despite disappointing manufacturing figures from Indonesia.
The gains, however, come after a torrid August for developing economies as investors pulled out their cash in expectations the US Federal Reserve will soon wind down its stimulus programme.
Gold cost US$1,391.40 an ounce at 0210 GMT, down from US$1,390.00 late Monday.