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Asian Stocks Rise on China Manufacturing; Aussie Climbs

Yen Drops While Commodities, Aussie Climb on China Manufacturing
Pedestrians cross a road in front of an electronic stock board outside a securities firm in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

April 2 (Bloomberg) -- European stocks and commodities rose after the region’s policy makers increased bailout funds and a Chinese manufacturing gauge advanced to a one-year high. U.S. equity futures advanced, while the yen weakened.

The Stoxx Europe 600 Index added 0.2 percent as of 8:01 a.m. in London. Standard & Poor’s 500 Index futures gained 0.3 percent. Australia’s currency strengthened 0.6 percent to $1.0408, while the yen fell against all 16 major counterparts. Ten-year German bond yields rose six basis points to 1.85 percent. The S&P GSCI Index of commodities advanced 0.3 percent.

China’s Purchasing Managers’ Index rose to 53.1 in March from 51 the previous month, according to a government report yesterday. European finance ministers unveiled a package over the weekend including 500 billion euros ($667 billion) in fresh bailout funds on top of 300 billion euros already committed to rescue programs. Data later today may show U.S. manufacturing grew in March, based on a Bloomberg survey of economists.

“The PMI data shows China’s domestic demand is relatively strong,” said Sean Yokota, a Singapore-based currency strategist at UBS AG. “That’s positive because if China’s domestic demand is strong, Asia’s exports to China will be slightly better.”

U.S. Equity Futures

Gains in S&P 500 futures indicated that U.S. stocks may rise for a second day when trading begins. Ten-year Treasury yields climbed three basis points to 2.24 percent. The securities yielded as much as 46 basis points more than same-maturity German bunds today, the most in 13 months.

South Korea’s Kospi Index advanced 0.8 percent, while Taiwan’s Taiex Index lost 0.9 percent. The MSCI Asia Pacific Index was little changed. The equity benchmark jumped 11 percent in the first three months of this year, the biggest quarterly rally since September 2010.

China’s Premier Wen Jiabao has pledged to “fine-tune” economic policies as needed as weakness in export demand and a cooling housing market restrain economic growth. Analysts in a Bloomberg News survey last week unanimously said that banks’ reserve requirements will fall this year, while nine of 20 predicted lower benchmark borrowing costs.

Hong Kong’s Hang Seng Index slid 0.4 percent after Chinese Vice Premier Li Keqiang said policy makers will continue to take steps to stabilize prices. Markets in China and Vietnam are closed for holidays.

Yen Weakens

Sun Hung Kai Properties Ltd. slid 3 percent in Hong Kong, extending a 13 percent plunge on March 30. The Independent Commission Against Corruption on March 29 detained and later released Thomas and Raymond Kwok on suspected bribery charges. The two took over the chairmanship of the city’s biggest developer by value last year. No charges have been laid in the probe.

Copper increased 0.5 percent to $8,490 a metric ton for a third day of gains, while oil in New York advanced 0.1 percent to $103.15 a barrel. Nickel and zinc rose at least 1 percent.

The yen lost 0.2 percent to 82.99 per dollar. The Tankan index for Japan’s biggest manufacturers was unchanged last quarter from minus 4 in December, the Bank of Japan said. That was less than the median estimate of minus 1 in a Bloomberg News survey of economists.

“The worse-than-expected Tankan survey seems to be fueling talk that the BOJ will ease policy further,” said Lee Wai Tuck, a currency strategist at Forecast Pte in Singapore. “This is probably leading to selling of the yen.”

The cost of insuring Asia-Pacific bonds against non-payment fell, according to credit-default swap traders. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan slid 4 basis points to 156 basis points, Royal Bank of Scotland Group Plc prices show. The gauge declined 47 basis points in the first three months of the year, the biggest quarterly drop since the period ended September 2009, according to data provider CMA.

To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net.

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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