Stimulus hopes boost Asia
AP and AFP
March 25, 2014, 12:18 am TWN
SEOUL/HONG KONG--Asian stock markets were boosted Monday by expectations of economic stimulus in China after manufacturing continued to weaken in March. European shares fell after a eurozone manufacturing survey reinforced expectations of a slow recovery.
Germany's DAX fell 0.8 percent to 9,273.17 and France's CAC 40 dropped 0.8 percent to 4,299. Britain's FTSE 100 shed 0.4 percent to 6,532.48. A survey of factory purchasing managers in countries using the euro showed that the region's economic recovery was fitful in the first quarter. The headline index fell slightly to 53.2 in March, a level indicating very modest growth.
Wall Street was set for gains after falling on Friday. S&P 500 futures were up 0.2 percent at 1,861 and Dow Jones futures gained 0.2 percent to 16,245.
In Asia, markets climbed Monday as investors brushed off fresh evidence indicating that China's manufacturing sector is shrinking, while some analysts said it could prompt lawmakers to loosen monetary policy.
Japanese shares enjoyed a healthy rebound following a heavy sell-off on Thursday, buoyed by the yen's losses against the dollar, although investors remain on edge over the Crimea crisis.
Tokyo gained 1.77 percent, or 251.07 points, to end at 14,475.30, Sydney rose 0.17 percent, or 8.8 points, to 5,346.9 and Seoul closed 0.55 percent higher, adding 10.61 points to 1,945.55.
Shanghai closed up 0.91 percent, or 18.66 points, at 2,066.28 while Hong Kong rallied 1.91 percent, or 409.75 points, to 21,846.45.
HSBC said preliminary readings showed Chinese factory activity had contracted in March, adding to concerns about the world's number two economy.
The British banking giant's flash purchasing managers index came in at 48.1, an eight-month low and down from 48.5 in February. A final figure will be released next week.
Anything below 50 indicates contraction, while a figure above points to expansion.
The worse-than-expected result suggested that the slowdown in the world's No. 2 economy is deepening, J.P. Morgan's chief China economist Haibin Zhu said in a report.
Beijing will likely introduce a series of pro-growth measures focusing on accelerating fiscal spending on infrastructure and reforms, the report said.