HONG KONG (MarketWatch) — Most Asian markets eked out small gains Monday to start a new quarter on a mildly positive note, with downbeat Chinese manufacturing data tempering lingering optimism over last week’s agreement in Europe to stem the region’s debt crisis.
Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.33% helped lead regional gains with a 0.9% advance and Taiwan’s Taiex gained 0.7%, while China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.06% ended marginally higher.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% gave up early gains to post a fractional decline, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% shed 0.1%.
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Hong Kong’s share market was closed for a holiday on Monday.
HSBC’s manufacturing Purchasing Managers’ Index slipped to 48.2 in June, down from 48.4 in May. Read more on HSBC’s China PMI.
“Asian stocks have largely held onto Friday’s gains amid still falling, but not as bad as expected, survey data,” said Chris Clark, an analyst at Icap.
The broader Asian gains on Monday built on a solid performance on Friday, a day when U.S. shares also rose sharply. Read more on U.S. shares.
Early Friday Brussels time, European Union leaders announced a range of measures designed to alleviate the worst threats from the region’s debt crisis, including a new financial supervisory system and a plan to directly recapitalize banks from Europe’s bailout funds. Read more on Europe plan.
Spanish and Italian government bond yields fell sharply, and the euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.5749% jumped Friday, as financial markets cheered the plan. Read more on currencies.
“There seems to be a genuinely stronger feeling in the markets this time that European policy makers really have taken stronger and more courageous moves this time around, which hopefully will give them a lot more breathing space to build on the measures announced,” said Howard Archer, economist at IHS Global Insight.
Some Japanese exporters were picking up on improved sentiment toward the European region, with consumer electronics firm Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 -1.07% /zigman2/quotes/204149068/delayed TOSYY -1.98% and Citizen Holdings Co. /zigman2/quotes/202792467/delayed JP:7762 -1.44% /zigman2/quotes/206789815/delayed CHCLF 0.00% up 0.7% each.
Offering a further reason for optimism Monday in Japan, the central bank’s closely-watched tankan business-sentiment improved more than forecast, with large manufacturers indicating that they expected conditions to improve in the third quarter. Read more on tankan survey.
“Historically, the tankan has been a reasonably reliable guide to economic activity in the quarter just passed,” said David Rea, economist at Capital Economics, although he also said that the Japanese government’s recent stimulus measures may have caused the relationship to temporarily weaken.
Shipping firms advancing in Tokyo included Nippon Yusen K.K. /zigman2/quotes/203488100/delayed JP:9101 -0.80% /zigman2/quotes/201056741/delayed NYUKF -3.22% , up 2.4%, and Mitsui O.S.K. Lines Ltd. /zigman2/quotes/204152844/delayed JP:9104 -0.39% /zigman2/quotes/210406910/delayed MSLOF -3.86% , ahead by 0.7%.
Commodity-linked companies strengthened, with investors picking up on a positive session for metals and oil in New York on Friday.
Japanese oil firm JX Holdings Inc. /zigman2/quotes/208590403/delayed JP:5020 +1.13% /zigman2/quotes/204275471/delayed JXHGF -8.42% advanced 1.2%, and steel maker Kobe Steel Ltd. /zigman2/quotes/207391157/delayed JP:5406 -1.54% /zigman2/quotes/204389518/delayed KBSTF -7.14% rose 2.1%.
Energy firms led the gains for the Australian share market, with Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -0.15% /zigman2/quotes/206770672/delayed WOPEF +3.37% up 2.6% and Beach Energy Ltd. /zigman2/quotes/200513631/delayed AU:BPT -3.24% /zigman2/quotes/206671354/delayed BEPTF 0.00% ahead by 4.3%. Read more on Australian stocks.
Exporters were also higher in Korea, as car makers Hyundai Motor Co. /zigman2/quotes/204364212/delayed HYMTF 0.00% up 1.3% and affiliate Kia Motors Corp. /zigman2/quotes/205439169/delayed KIMTF +8.21% up 0.8% despite the looming threat of a labor strike.
Among decliners, Shanghai-listed car makers fell sharply after the southeastern city of Guangzhou became China’s fourth urban area to limit new auto registrations in order to reduce congestion. Read more on China car-purchase limits.