Stocks Rise as China Factory Data Elevates Sentiment: Markets Turn

(Bloomberg) — Equities and currencies rose in Asia, led by a more than 3% increase in the Hong Kong benchmark index, while Chinese manufacturing posted its biggest improvement in more than a decade.

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An Asian equity benchmark has advanced the most since mid-January, while futures for the S&P 500, Nasdaq 100 and Euro Stoxx 50 all offset losses following a report showing the world’s second-largest economy is recovering strongly after Covid-19. restrictions were lifted.

Commodity currencies rose, with the Australian dollar recovering from a loss, while the foreign yuan strengthened by more than 0.6%. Oil also climbed along with gold.

China’s manufacturing purchasing managers’ index climbed to its highest reading since April 2012 last month, while another gauge also improved. The data was released ahead of the country’s annual National People’s Congress, with traders expecting more about Beijing’s economic plans.

“China is currently in a relatively good position relative to other major economies in terms of the easing cycle,” said Elizabeth Kwik, director of investment for Asian equities at abrdn, on Bloomberg Television. Any government growth stimulus signals “will be something good to watch that could come out of the NPC,” she said, referring to Congress.

Wednesday’s rebound marks a reversal from recent weeks, when a repricing of the top US interest rates caused investors to sell just about every risky asset. The Hang Seng China Enterprises Index rose nearly 4%, aided by technology and real estate stocks, recovering from a loss of more than 11% in February.

The latest data “should keep the yuan on a firm footing” heading into the event, while “commodity currencies such as the Australian dollar may also bolster expectations of a solid recovery in Chinese demand,” said Wei Liang Chang, a strategist at DBS. Bank Ltd.

A gauge of dollar strength fell and government bond yields rose slightly. Australian and New Zealand government bond yields fell.

Bond yields rose in Europe on Tuesday after hot inflation data prompted a reassessment of interest rate expectations. The pick-up of a theme dominated trading in a month in which the Federal Reserve signaled its intention to raise interest rates higher than the market had expected.

Bond traders no longer view the likelihood of a Fed rate cut this year as better than even, a shift from what they expected a month ago. Market expectations are also driving the European Central Bank to raise rates until February 2024, with a fully priced ECB final rate of 4%.

Main events this week:

  • Eurozone S&P Global Eurozone Manufacturing PMI, Wednesday

  • US construction spending, ISM Manufacturing, light vehicle sales, Wednesday

  • Eurozone CPI, unemployment, Thursday

  • US first jobless claims, Thursday

  • Eurozone S&P Global Eurozone Services PMI, PPI, Friday

Some of the major movements in markets:


  • S&P 500 futures were little changed as of 2:08 p.m. Tokyo time. The S&P 500 fell 0.3%

  • Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.1%

  • Japanese Topix index rose 0.1%

  • Hong Kong’s Hang Seng index rose 3.3%

  • China’s Shanghai Composite Index rose 0.9%

  • The Australian S&P/ASX 200 index changed little


  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro rose 0.1% to $1.0591

  • The Japanese yen fell 0.2% to 136.41 per dollar

  • The offshore yuan rose 0.5% to 6.9183 per dollar


  • Bitcoin rose 2.7% to $23,777.69

  • Ether rose 3.2% to $1,657.44


Raw materials

  • West Texas Intermediate crude rose 0.6% to $77.49 a barrel

  • Spot gold rose 0.2% to $1,830.38 an ounce

This story was created with the help of Bloomberg Automation.

–With help from Charlie Zhu, Wenjin Lv and Akshay Chinchalkar.

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