Asian markets mostly rose Monday after more weak Chinese manufacturing data fuelled hopes for fresh monetary easing, following hints from the US Fed chief about similar moves in the United States.
Tokyo slipped 0.39 percent by the break but Hong Kong added 0.12 percent, Sydney gained 0.23 percent, Shanghai was 0.22 percent higher and Seoul put on 0.30 percent.
Fears over growth in China were stoked again on Saturday when the official purchasing managers’ index (PMI) of manufacturing activity fell to a nine-month low of 49.2 in August from 50.1 in July, owing to slumping demand in the key export markets of Europe and the United States.
A reading above 50 indicates expansion, while one below 50 points to contraction.
It adds to rising concerns over China’s economic growth and comes despite Beijing cutting interest rates and lowering the amount of cash banks must keep in reserve as it looks to boost activity. China’s economy grew just 7.6 percent in the three months to June, the worst performance in three years and the sixth straight slowdown, while figures for trade, industrial output and retail sales in July were also weak.
The latest results will boost expectations of another cut to banks’ reserve requirements or even interest rates. Global markets posted gains at the start of last month as dealers bet that central banks in China, Europe and the United States would announce fresh stimulus and easing policies, but the lack of action has led to selling pressure in the past few weeks.
In the United States, Fed chief Ben Bernanke on Friday told central bankers that stagnation in the labour market was “a grave concern” and signalled he would be pushing for more help for the economy. His comments led to speculation that the Fed would undertake a third round of bond-buying, or quantitative easing, lifting US shares.
The Dow added 0.69 percent, the S&P 500 rose 0.51 percent and the Nasdaq climbed 0.60 percent. However, Mizuho Securities senior technical analyst Yutaka Miura told Dow Jones Newswires: “Although Bernanke’s comments left hopes in markets, we still find it difficult to foresee when and whether the Fed will really take action.
“The external environment looks uncertain, with the Chinese economy deteriorating. Any aggressive bids may be limited.”
On currency markets the euro bought $1.2575 in early Tokyo trade from 1.2576 in New York late Friday. The European currency also lost ground against the yen, trading at 98.43 yen compared with 98.51 late Friday.
The dollar fell to 78.25 yen from 78.31 yen.
Oil eased, with New York’s main contract, light sweet crude for delivery in October, shedding 38 cents to $96.09 a barrel and Brent North Sea crude for October down nine cents to $114.48. Gold was at $1,689.80 at 0315 GMT compared with $1,658.80 on Friday.
