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Asia stocks mostly up as China manufacturing rises

By Pamela Sampson
AP Business Writer / April 2, 2012
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BANGKOK—Asian stock markets mostly rose Monday after a Chinese survey showed that manufacturers in the world's No. 2 economy boosted production for a fourth straight month.

Benchmark oil stayed above $103 per barrel. The dollar fell against the euro but gained against the yen.

Japan's Nikkei 225 index gained 0.4 percent to 10,121.48 despite businesses remaining pessimistic in the central bank's latest quarterly "tankan" survey.

South Korea's Kospi added 0.8 percent to 2,029.43 while Australia's S&P/ASX 200 was marginally lower at 4,333.30. Benchmarks in Indonesia, Singapore and Thailand rose.

Hong Kong's Hang Seng fell 0.3 percent to 20,487.07, dragged down by a corruption scandal involving Sun Hung Kai Properties, the Chinese financial hub's largest property developer by market value. Markets in mainland China were closed for a public holiday.

Chinese manufacturing gained momentum in March, helped by a recovery in the auto, tobacco and electronics sectors, though analysts said conflicting data suggest lingering weakness.

The state-affiliated China Federation of Logistics and Purchasing said Sunday that its purchasing managers index, or PMI, rose 2.1 points to 53.1 in March, up from February's 51.0 and January's 50.5. A reading above 50 signifies expansion.

A rise in new factory orders suggests a recovery in some industries, though a second set of data, from HSBC, said that after adjusting for seasonal factors, its manufacturing index for China for March was 48.3, down from 49.6.

HSBC'S index, which tends to reflect trends in the export sector more strongly than the official index, has remained below 50 for five straight months, and recorded its lowest average reading in three years in the first quarter, HSBC said.

But analysts at Credit Agricole CIB in Hong Kong said called the official reading on China manufacturing "surprisingly upbeat" and said set the stage for a strong week in stock markets.

"Investors will watch PMI readings from other regional economies, including Korea, Taiwan and India. If they also improve, the story of Asia regaining momentum ... would provide more lasting support for markets," Credit Agricole said in a report.

The data from China boosted Australia's raw materials sector, whose fortunes are largely tied to Chinese demand. BHP Billiton, the world's largest mining company, jumped 1.8 percent. Fortescue Metals Group gained 1.9 percent. Rio Tinto Ltd. rose 1.3 percent.

Japan's Hitachi Ltd. jumped 3.6 percent, a day after announcing it concluded an agreement with the Lithuanian government to build a nuclear power plant, Kyodo News agency said.

Other exporters were helped by a softening yen, which increases the value of repatriated profits and helps lower prices of Japanese goods sold overseas. Ricoh Co. jumped 4 percent and Honda Motor Co. added 2.7 percent.

In Hong Kong, Sun Hung Kai Properties was down 2.5 percent after the company's chairmen, billionaire brothers Thomas and Raymond Kwok, were arrested Thursday on bribery charges. The stock has tumbled more than 15 percent since Friday.

"The market is still being rocked by the scandal," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

Rising consumer spending boosted U.S. stocks on Friday, and Wall Street closed its best first quarter since 1998.

The Dow Jones industrial average rose 0.5 percent to close at 13,212.04. The Standard & Poor's 500 index rose 0.4 percent to 1,408.47. The Nasdaq composite fell 0.1 percent to 3,091.57.

For the quarter, the Dow posted an 8 percent gain and the S&P a 12 percent gain, the best for those indexes in 14 years. The gain was 19 percent for the Nasdaq, its best since 1991.

Benchmark oil for May delivery was up 31 cents to $103.33 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 24 cents to settle at $103.02 per barrel in New York on Friday.

In currencies, the euro rose to $1.3346 from $1.3334 late Friday in New York. The dollar rose to 82.96 yen from 82.86 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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