Asian Stocks Advance as Investors Unfazed by China PMI

Asian stocks rose, with the regional benchmark index paring last week’s losses, as Japanese markets surged on reopening after a holiday and as investors were unfazed by a drop in Chinese manufacturing activity.

Yanzhou Coal Mining Co. jumped 6.6 percent in Hong Kong after the shares were upgraded by Credit Suisse Group AG. Macquarie Group Ltd. rose 2.9 percent after Australia’s biggest investment bank said it expects full-year earnings will jump. Yamato Holdings Co., a parcel delivery company, gained 3.5 percent in Tokyo on a report it will tie up with China Post Group.

The MSCI Asia Pacific Index rose 1.1 percent to 134.2 as of 7:43 p.m. in Tokyo after dropping 1.2 percent last week. All 10 industry groups on the gauge advanced. Shares held gains after a preliminary China Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics Ltd. unexpectedly slid.

“It’s reflecting a slowdown we are seeing globally,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. “As long as we can see what’s happening with the global economy, it’s not a surprise. Obviously it’s not a positive for the market, but I don’t think it’s a huge negative.”

Japan’s Topix index climbed 1.5 percent after a three-day weekend. Hong Kong’s Hang Seng Index rose 1.9 percent. The Hang Seng China Enterprises Index, also known as the H-share index, climbed 2.8 percent to extend its rebound after falling into a bear market last week. The Shanghai Composite Index added 0.9 percent.

China Manufacturing

The China manufacturing gauge fell to 48.1 in March from 48.5 a month earlier. The preliminary reading compares with the 48.7 median estimate of 22 analysts surveyed by Bloomberg News. Numbers below 50 signal contraction.

“Weakness is broadly-based with domestic demand softening further,” Qu Hongbin, Hong Kong-based chief China economist at HSBC, said in a statement. “We expect Beijing to launch a series of policy measures to stabilize growth. Likely options include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower.”

China issued rules March 21 for a trial program allowing companies to sell preferred stock, expanding financing options for the country’s banks as they seek to address tougher capital requirements. Companies will be able to issue the shares if they are included in the Shanghai Stock Exchange 50 A-Share Index, the China Securities Regulatory Commission said in a statement on its official microblog.

Regional Indexes

South Korea’s Kospi index added 0.6 percent. Australia’s S&P/ASX 200 Index climbed 0.2 percent and New Zealand’s NZX 50 Index lost 0.1 percent. Taiwan’s Taiex index gained 0.3 percent, while Singapore’s Straits Times Index rose 1.3 percent.

Yanzhou Coal surged 6.6 percent to HK$5.99 after Credit Suisse raised its rating to neutral from underperform.

Macquarie Group rose 2.9 percent to A$56.42 after saying it expects fiscal-year earnings to rise as much as 45 percent to the highest since 2008 as the outlook for its fixed-income, currencies and commodities unit improved.

Yamato jumped 3.5 percent to 2,110 yen after the Nikkei newspaper reported the delivery service will tie up with China Post to ship products bought online to homes in that country.

Among stocks that fell, Hutchison Whampoa Ltd. dropped the most since October 2011 after agreeing to sell a stake in A.S. Watson & Co., with a lower-than-expected valuation indicated for the retail unit. The stock slumped 5.1 percent to HK$101.60 in Hong Kong.

U.S. Futures

Futures on the Standard & Poor’s 500 Index rose 0.2 percent today. The equity measure lost 0.3 percent on March 21.

Investors were also watching developments in the Ukraine crisis. World leaders are gathering in the Netherlands to discuss tensions as Western nations express growing concern that Russia is massing soldiers on its neighbor’s border, with President Barack Obama seeking to mobilize opposition to Russia’s incursion into Crimea.

The MSCI Asia-Pacific gauge traded at 12.6 times estimated earnings, compared with 15.9 for the S&P 500 and 14.2 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Before it's here, it's on the Bloomberg Terminal.