SINGAPORE – Asia-Pacific equities traded higher on Monday, as data releases showed that growth in China’s production activity slowed in February.
In Japan, the Nikkei 225 rose 2.36% in morning trading as the index tried to recover from a nearly 4% drop on Friday. The Topix index gained 1.7%.
Shares in mainland China were higher, as the Shanghai composite rose 0.89%, while the Shenzhen component rose 2.03%. Hong Kong’s Hang Seng Index rose 1.44%.
Shares in Australia rose further as the S & P / ASX 200 gained 1.44%.
The largest MSCI index of Asia-Pacific equities outside Japan traded 0.98% higher.
South Korean markets are closed on Monday for a holiday.
China produces SMEs
China’s official procurement index (PMI) for February reached 50.6 over the weekend, according to data released by the country’s National Bureau of Statistics.
This was lower than the January reading of 51.3, but still above the level of 50 that separates the contraction expansion.
A private poll released on Monday also showed that China’s production activity in February is growing at a slower pace.
The Caixin / Markit production procurement managers’ index (PMI) reached 50.9, down from 51.5 in January.
Levels above 50 in PMI readings represent an expansion, while those below signify contraction. PMI readings are sequential and show monthly expansion or contraction.
Bond yields are falling
Movements in the Asia-Pacific markets came as bond yields fell.
The yield on the reference 10-year treasury note fell to its lowest level of 1.383%, the last trading to 1.4169%. Prices go back to yields.
In the Asia-Pacific, the 10-year Australian bond yield fell to 1.652%, from levels above 1.8% last week. The yield on 10-year Japanese government bonds also fell to 0.155%.
Oil prices are rising
Oil prices were higher in the morning trading hours in Asia, with international references to Brent crude futures rising 1.92% to $ 65.66 a barrel. US crude futures gained 1.9% to $ 62.67 a barrel.
The US dollar index, which tracks the dollar against a basket of its colleagues, was at 90,812 after recovering from levels below 90 at the end of February.
The Japanese yen traded at 106.60 per dollar, weaker than levels below 105.6 against the green dollar seen last week. The Australian dollar changed hands at $ 0.7752 after falling from levels above $ 0.792 last week.
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