Stocks gain, yen dips as China eases growth worry

Pedestrians walk pass past an electronic stock board outside a securities firm in Tokyo,. (Bloomberg pic)

SYDNEY: Stocks in Asia climbed with US and European equity futures, and Treasuries slipped as evidence of a pick-up in China’s manufacturing eased concerns about a global economic slowdown.

Chinese shares posted the biggest gains and equities climbed more than 1% in Japan, Hong Kong and South Korea, building on the biggest quarterly advance for Asian stocks since 2012.

Both of China’s key manufacturing PMIs for March beat the highest estimate in Bloomberg surveys of economists, and indicated an acceleration in activity in the world’s No.2 economy.

The yen declined while Treasuries fell with Australian government bonds. Oil pushed higher. US-China trade talks will resume when Vice Premier Liu He leads a delegation to Washington later this week.

Global equities are coming off the back of the best quarter since 2010 amid bets a move from major central banks to offer more policy support will help prop up earnings growth.

The advance helped to recoup most of the losses from the fourth quarter. Meanwhile, in the bond market, yields remain near multi-year lows amid concern about the deterioration in global growth.

The Chinese data went some way to ease these worries prior to the release of monthly jobs data at the end of the week in the US.

China’s data “was encouraging,” said Thomas Harr, global head fixed income and commodity research at Danske Bank. “There is still a good chance that global and euro-zone growth will improve in coming quarters, as the US and China will reach a trade deal, while the Fed’s dovish shift and China’s stimulus will help.”

Elsewhere, the lira slipped as preliminary results from the weekend’s municipal elections showed the popularity of President Recep Tayyip Erdogan is being tested.

The pound was steady as a resounding defeat on Friday left UK Prime Minister Theresa May at an impasse, with talk of a possible third general election in four years gathering steam.