Asian stocks jump as strong China data revives reopening optimism

beijingwalker · Mar 1, 2023

Asian stocks jump as strong China data revives reopening optimism

Tom Westbrook, Reuters News

March 1, 2023

SINGAPORE - Asian stocks rebounded from a two-month low on Wednesday as data showing China's manufacturing activity in February expanded at the fastest pace in more than a decade cheered investors, ofsetting fears over rising interest rates.

China's official manufacturing purchasing managers' index (PMI) stood at 52.6 last month against 50.1 in January, based on data from the National Bureau of Statistics, smashing expectations as production zoomed after the lifting of COVID-19 restrictions late last year.

China's non-manufacturing activity similarly grew at a faster pace in February, while data from the Caixin/S&P Global manufacturing PMI also pointed to a rise in factory activity in February for the first time in seven months.

That sent MSCI's broadest index of Asia-Pacific shares outside Japan surging more than 1% to 516.84, after having bottomed at 509.40 - its lowest since early January - earlier in the session.

Chinese stocks also received a boost, with China's blue-chip CSI 300 Index jumping more than 1%, while the Shanghai Composite Index was last about 0.6% higher.

Hong Kong's Hang Seng Index climbed 2.67%, while the Hang Seng Tech Index was up 4%. The Hang Seng Mainland Properties Index surged 3.5%.

"The China February PMI data this time has assumed even greater importance due to the usual lack of January/February hard data until later this month," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

"The China February official PMIs and Caixin manufacturing PMI all surprised strongly to the upside, and notably higher than the previous January figures."

Japan's Nikkei steadied at 27,446.91.

In currency markets, the dollar unwound earlier gains as some risk-on sentiment took charge, with the euro and sterling rising 0.06% and 0.04%, respectively.

The Aussie, often used as a liquid proxy for the yuan, edged 0.1% higher to $0.6735, bouncing from a two-month low of $0.6695 earlier in the session.

Softer-than-expected growth and inflation data in Australia sent the Aussie sliding in early Asia trade.

The local stockmarket, however, came off recent lows. It was last 0.16% higher.

The Chinese onshore yuan rose marginally to 6.9302 per dollar, while its offshore counterpart gained a larger 0.2% to 6.9400 per dollar.