HONG KONG: Asian markets were mostly higher on Monday despite fresh evidence indicating that China’s manufacturing sector is shrinking, while Tokyo rebounded from a heavy sell-off in the previous session.
The dollar edged up slightly against the yen but investors remain on edge over the Crimea crisis.
Tokyo rose 1.83 percent by the break, Hong Kong added 0.95 percent, Seoul was 0.38 percent higher and Shanghai was up 0.25. But Sydney eased 0.17 percent.
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 (PMI) 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.
“China’s growth momentum continued to slow down,” HSBC economist Qu Hongbin said in a statement. “Weakness is broadly based with domestic demand softening further. We expect Beijing to launch a series of policy measures to stabilize growth.”
The figures are the latest to suggest the Chinese economy, a key driver of regional and global growth, is slowing down following several months of weak data including on trade, investment and inflation.
But despite the downbeat results, regional markets were broadly buoyant, with Japan’s Nikkei surging on bargain-hunting following a 1.65 percent fall on Thursday. The market was closed Friday for a public holiday.
Providing support to Tokyo shares was a weaker yen, which helps exporters. In early trade the dollar bought 102.50 yen, compared with 102.23 yen in New York Friday. The euro fetched $1.3795 against $1.3794 and 141.42 yen from 141.87 yen.
Wall Street provided a negative lead, with US investors on edge over events in eastern Europe after Russia absorbed Crimea from Ukraine following a controversial referendum.
The Dow fell 0.17 percent, the S&P 500 lost 0.29 percent and the Nasdaq shed 0.98 percent.
Markets are keeping an eye on Europe as US President Barack Obama—who has led stiff Western sanctions against Moscow—heads to The Hague for a gathering of world leaders that could see Russia excluded from the Group of Eight rich countries.
With Russia massing what NATO called a “very sizeable” force on its border with Ukraine, there are fears that President Vladimir Putin is hungry for more Ukrainian territory.