* MSCI Asia ex-Japan up 0.3 pct, Nikkei opens up 0.8 pct
* China PMI surprises, boosts Aussie
By Chikako Mogi
TOKYO, April 2 (Reuters) – Asian shares kicked off the
second quarter in positive territory on Monday as risk appetite
returned after China manufacturing data dispelled fears of a
hard landing in the world’s second biggest economy.
MSCI’s broadest index of Asia Pacific shares outside Japan
rose 0.3 percent, after ending the first three
months of 2012 up nearly 12 percent, its best showing since the
third quarter of 2010 and best first quarter in 21 years.
Japan’s Nikkei average opened up 0.8 percent, after
posting a more than 19 percent gain in its best first quarter in
24 years.
Data on Sunday showed China’s official Purchasing Managers’
Index (PMI), which highlights large factories,
jumped to an 11-month high of 53.1 in March, beating forecasts.
But credit-constrained smaller manufacturers struggled,
suggesting that while the world’s second-biggest economy is not
crashing, it will require some monetary policy easing for
support.
“We continue to expect cautious, though supportive, monetary
policy easing,” ANZ Bank said in a research note. “China’s
manufacturing sector continues to expand, consistent with our
view that the economy’s momentum is strengthening.”
Market sentiment has been supported over the past several
months by massive liquidity injections from global central banks
and improving U.S. economic data, but turned cautious in recent
sessions due to growing doubts over China’s resilience.
The latest Chinese data calmed those jitters and boosted
riskier assets such as the Australian dollar, which is closely
linked to economic conditions in China, Australia’s biggest
single export market. The Australian dollar soared
nearly a full U.S. cent to $1.0441, having peaked at $1.0470.
“This is now three months of trend improvement, and is good
news for the AUD and commodity currencies in general,” said
Annette Beacher, head of Asia Pacific research at TDSecurities.
Later in the session, U.S. and European manufacturing data
will be released, offering clues on global factory activity.
Market activity may be subdued in this holiday-shortened
week, with Shanghai markets closed through Wednesday while
European, U.S. and some Asian markets will be closed on Friday
for the long Easter weekend.
EUROPE MAKES PROGRESS
The euro rallied against the dollar and the yen on
Friday after budget cuts in Spain boosted hopes the country
could stick to an austerity path.
Euro zone finance ministers also agreed on Friday to combine
its two rescue funds to make 500 billion euros of new funds
available in case of emergency until mid-2013, on top of 200
billion euros already committed to bailouts for Greece, Ireland
and Portugal.
While it marked a step towards fortifying the safety net to
prevent the debt crisis from spilling wider, it remained unclear
if Europe’s G20 partners would see the boost as sufficient.
World stock markets posted double-digit gains for the first
quarter, as data showed U.S. consumer spending rose by the most
in seven months in February and consumer confidence rebounded to
its highest in more than a year in March. But a separate report
on Friday showed the pace of business activity in the U.S.
Midwest slowed more than expected in March.
Oil prices stayed firm, with U.S. crude futures up
0.5 percent to $103.51 a barrel on Monday. Brent settled
up 49 cents at $122.88 a barrel on Friday. Oil ended the first
quarter with the biggest quarterly gain since the beginning of
2011 as the growing threat of a disruption of Iranian exports
added to supply concerns.
Barclays Capital analysts said that easing of three key
worries – fiscal austerity in Spain, oil price spikes and growth
slowdown in China – would represent a meaningful positive drive
for equities.
Asian credit markets steadied early on Monday, with the
spread on the iTraxx Asia ex-Japan investment-grade index
barely changed from Friday.
