Asian markets mostly climbed on Thursday after data showed manufacturing activity in the world’s number two economy picked up strongly in March, while Tokyo was lifted by renewed weakness in the yen.
Traders are also keeping an eye on developments in Europe, where officials in Cyprus will present later in the day a revised fund-raising plan to help it access crucial bailout cash.
Wall Street provided a positive lead after the US Federal Reserve kept its huge stimulus measures in place and said the economy has shown signs of picking up.
Tokyo climbed 1.20 per cent by the break, Seoul added 0.30 per cent, Hong Kong was up 0.33 per cent and Shanghai climbed 0.10 per cent while Sydney was 0.18 per cent lower.
Confidence was given a boost after HSBC bank released preliminary figures showing a healthy rise in the manufacturing sector.
HSBC’s China Manufacturing Purchasing Managers Index rose to 51.7 in March, compared with 50.4 in February. A reading above 50 indicates expansion and anything below points to contraction.
The latest figures break a recent spell of worrying results from trade to inflation that have raised concerns about the economy, which saw its weakest growth in 13 years last year.
“This implies that the Chinese economy is still on track for gradual growth recovery,” HSBC economist Qu Hongbin said in a statement.
And Hannah Li, senior equity analyst at Sun Hung Kai Financial, told Dow Jones Newswires: “We’ve had a slew of weaker-than-expected economic data for February, so the HSBC flash PMI at least sooths some worries about the Chinese economy.”
In the United States the Federal Reserve ended it latest policy meeting, saying it would keep its US$85 billion-a-month easing policy in place until the economy had stabilised.
It also said economic growth had rebounded from the flat last year fourth quarter to a moderate pace in recent months but trimmed its full-year outlook owing to Europe’s woes and huge cuts in US federal spending that kicked in on March 1.
Fed Chairman Ben Bernanke said the policy committee “remains concerned that restrictive fiscal policies may slow economic growth and job creation in coming months”.
The announcement lifted US stocks, with the Dow up 0.39 per cent, the S&P 500 adding 0.67 per cent and the Nasdaq ending 0.78 per cent higher.
On currency markets the euro and dollar held on to gains made against the yen in New York on Wednesday as dealers moved back into higher-yielding assets after this week’s turbulence fuelled by eurozone worries.
The euro bought US$1.2945 and 124.23 yen in early Asian trade Thursday, compared with US$1.2937 and 124.17 yen in New York.
The dollar fetched 95.94 yen against 95.98 yen.
Later Thursday in Nicosia political leaders will decide on a newly drawn up plan to secure a bailout after parliament rejected a controversial tax on savings, fuelling fears it could fail to meet its debt obligations.
President Nicos Anastasiades was to “present a Plan B package to party leaders”, state television reported.
Global markets fell on Monday after Cyprus unveiled a proposal to tax bank savings up to 9.9 per cent as part of an agreement with the European Union to qualify for a 10 billion euro bailout.
Oil prices eased, with New York’s main contract, light sweet crude for delivery in May down 23 cents to US$93.27 a barrel and Brent North Sea crude for May shedding 33 cents to US$108.39.
Gold was at US$1,605.40 an ounce at 0100 GMT compared with US$1,610.87 late Wednesday.Topics: Asian Stock Markets