Asian bourses up on China stimulus speculation

A woman walks past an electronic stock board of a securities firm in Tokyo on Friday, May 1, 2015. Asian markets gained ground Monday, May 4, after a long holiday weekend, energized by a strong finish on Wall Street last week and gloomy Chinese economic data that heightened expectations for more stimulus measures. AP PHOTO/EUGENE HOSHIKO

HONG KONG–Asian markets gained ground Monday after a long holiday weekend, energized by a strong finish on Wall Street last week and gloomy Chinese economic data that heightened expectations for more stimulus measures.

Seoul closed up 0.24 percent, or 5.06 points, to 2,132.23, led by technology and financial shares, while Hong Kong stocks ended down 9.18 points, or 0.03 percent, at 28,123.82.

Sydney rose 13.1 points, or 0.23 percent, to close at 5,827.5 as the Aussie dollar slipped on expectations of another interest rate cut to combat a recent surge in the unit.

Chinese shares rallied on hopes of monetary easing following a survey of manufacturing activity that recorded its worst contraction in a year in April. Shanghai added 0.87 percent to 4,480.46.

Tokyo was closed for a public holiday, along with financial markets in Thailand and Malaysia.

As well as the news on China’s economic front, Asian bourses took their lead from a rally on US markets on Friday which reversed a bruising two-day retreat following a dismal US economic growth report.

HSBC’s final purchasing managers’ index (PMI) for China came in at 48.9 for April, below the break-even point of 50 and the weakest since 48.1 in the same month last year, indicating subdued domestic demand is hampering the economy.

The British bank’s index tracks activity in China’s factories and workshops and is regarded as a barometer of the health of the Asian economic giant.

The outcome was down from a preliminary reading of 49.2 and marked the second monthly contraction in a row after March’s 49.6.

China’s government on Friday had posted its official PMI at 50.1 for last month, unchanged from March when the gauge showed growth for the first time this year.

On Australian markets, attention was on a central bank meeting on Tuesday expected to address a rebound in the currency–problematic as the nation grapples with the decline of a mining boom.

“The recent surge in the Australian dollar would be viewed quite dimly by the folks at the Reserve Bank,” Bill Evans, chief economist at Westpac Banking Corp, told Bloomberg News.

Failing to cut rates “in the face of such strong market pricing will affect the bank’s credibility over time,” he added.

The dollar extended gains against the euro in Asia on Monday ahead of the release of a closely watched report on the US labor market, analysts said.

The euro bought $1.1194 in afternoon Singapore trade from $1.1200 in New York late Friday. It also fell to 134.40 yen from 134.56 yen.

The greenback was changing hands at 120.07 yen from 120.14 yen on Friday. The Australian dollar fell to 78.24 US cents from 78.90 US cents.

“Another big week for the dollar as markets await the US non-farm payrolls report this Friday,” Phillip Futures said in a market commentary.

“A strong labor market report will likely strengthen the dollar. Conversely, weak data is likely to push the dollar down.”

Singapore’s United Overseas Bank said the report on the US labor market could “swing market expectations for (the) Fed Reserve’s future course of interest rate actions.”

Oil prices fell in Asia as dealers eyed the lackluster manufacturing data from China, which raised concerns about weak demand from the world’s top energy consumer.

US benchmark West Texas Intermediate fell two cents to $59.13 while Brent eased seven cents to $66.39 in afternoon trade.

Gold fetched $1,182.38 against $1,182.97 earlier Monday.

In other markets:

— Mumbai surged 1.77 percent, or 479.28 points, to end at 27,490.59.

Oil & Natural Gas Corporation surged 7.57 percent to 327.65 rupees, while private lender ICICI Bank fell 0.63 percent to 329.15 rupees.

— Singapore closed down 0.13 percent, or 4.69 points, at 3,482.70.

Real estate developer Capitaland rose 1.90 percent to Sg$3.76 while Singapore Telecom eased 1.13 percent to Sg$4.38.

— Jakarta ended up 1.08 percent, or 54.71 points, at 5,141.14.

Automaker Astra International gained 3.65 percent to 7,100 rupiah, while property developer Pakuwon Jati slipped 4.57 percent to 418 rupiah.

— Taiwan rose 24.99 points, or 0.25 percent, to 9,845.04.

Taiwan Semiconductor Manufacturing Co. closed 0.34 percent higher at Tw$147.5, while Hon Hai Precision Industry added 1.20 percent to Tw$93.1.

— Wellington fell 30.32 points, or 0.52 percent, to 5,767.08.

Air New Zealand was down 0.56 percent at NZ$2.675 and Spark slipped 1.34 percent to NZ$2.9.

— Manila closed 1.32 percent, or 101.62 points, higher at 7,816.44.

Bank of the Philippine Islands gained 1.68 percent to 103 pesos while Ayala Land Inc. rose 3.49 percent to 40 pesos.