Asia stocks rise on expectations of China easing
BANGKOK (AP) — Asian stock markets rose Monday after a contraction in China's manufacturing boosted expectations of more stimulus for the world's second-biggest economy.
An industry group said on the weekend that China's purchasing managers index, which reflects manufacturing activity, fell to 49.2 in August from July's 50.1 on a 100-point scale. Numbers below 50 show a contraction. It was the group's weakest reading to date.
That fueled doubts about whether China has started to recover from its deepest economic downturn since the 2008 global financial crisis. China's economic growth fell to a three-year low of 7.6 percent in the second quarter. Corporate profits and other indicators have fallen despite government stimulus measures.
"The numbers were really bad, and many people believe that the government will have to do something to increase liquidity," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.
Japan's Nikkei 225 index fell 0.4 percent to 8,807.40. But after a lower opening, Hong Kong's Hang Seng gained 0.4 percent to 19,549.82. South Korea's Kospi also reversed course, gaining 0.5 percent to 1,913.38. Australia's S&P/ASX 200 added 0.4 percent to 4,333.90.
Shares in mainland China and Taiwan also rose. The two countries signed an agreement Friday to allow Taiwanese banks to handle China's yuan currency. Under the deal, signed by the two sides Friday, Taiwanese banks can take yuan deposits and convert yuan into the New Taiwan dollar, skipping the current process of first converting the yuan into U.S. dollars.
Benchmark crude for October delivery was down 22 cents to $96.26 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, crude rose $1.85 to end at $96.47 per barrel after Federal Reserve Chairman Ben Bernanke made clear in a speech that the central bank will do more to revive the U.S. economy.
In currencies, the euro rose to $1.2577 from $1.2560 late Friday in New York. The dollar fell to 78.25 yen from 78.31 yen.