HONG KONG (AP) — Australian shares led Asian stock markets modestly higher on Monday after a report showed Chinese manufacturing expanded for the first time this year, signaling that the No. 2 economy's growth slowdown has bottomed out.
Australia's benchmark S&P/ASX 200 index rose 0.8 percent to 5,450.80 and the country's currency strengthened after HSBC's preliminary purchasing managers' index showed that activity in China's huge manufacturing sector rose to the highest level since December.
The bank said the reading shows that that the effects of recent mini-stimulus measures unleashed by Beijing to boost growth were filtering through to the economy. Beijing is targeting full-year economic growth of 7.5 percent and last week Premier Li Keqiang vowed that the country would avoid a so-called "hard landing."
A Chinese rebound would benefit big mining companies in Australia, where the resource-driven economy has become highly dependent on China's demand for commodities such as iron ore.
"Signs of improvement amid policy support ought to allay overdone fears of a hard landing in China," Mizuho Bank said in a report. "And this ought to inspire some optimism in broader Asia."
Gains in other Asian markets were more restrained. Japan's Nikkei 225 edged 0.1 percent higher to 15,369.54 while South Korea's Kospi rose 0.4 percent to 1,976.34. Hong Kong's Hang Seng gained 0.3 percent to 23,262.39 while the Shanghai Composite Index in mainland China was flat at 2,027.35.
In energy trading, the price of U.S. benchmark crude for August delivery rose 33 cents to $107.16 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 78 cents to settle at $106.83 per barrel on Friday.
In currencies, the dollar slipped to 101.92 Japanese yen from 102.08 in late trading Friday. The euro rose to $1.3607 from 1.3599.