Asian stocks and the Australian dollar rose on Monday as upbeat news from China's factory sector and fresh highs on Wall Street fueled investor appetite for riskier assets. Crude oil held near nine-month highs as fighting in Iraq intensified.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.7 percent by mid-morning while Japan's benchmark Nikkei rose to its highest level since January 24, extending gains after posting a 1.7 percent weekly gain on Friday. The mood was upbeat after data showed domestic manufacturing activity in June expanded for the first time in three months.
The Aussie
The Aussie, which closely tracks the economic performance of China, the Australia's top exporter, rallied on the stronger-than-expected Chinese factory survey, jumping more than a quarter of a cent to as high as $0.9431 AUD=D4, edging towards a two-month peak of $0.9438 hit earlier in the month.
A flash reading of HSBC's China purchasing managers' index (PMI) rose to 50.8 in June, the first expansion in six months. The figure was well above May's final reading of 49.4 and Reuters estimates for 49.7, offering new signs the economy is stabilizing thanks to Beijing's measures to shore up growth.
The Asia-Pacific gauge added 0.4 percent last week, to cap its longest run of weekly gains since August, as Federal Reserve Chair Janet Yellen said she expects U.S. interest rates will stay near zero for a some time after stimulatory bond buying ends.
Wall Street
Wall Street saw another record close on Friday with U.S. stocks gaining for the sixth straight day and the Dow Jones Industrial Average and the S&P 500 hitting record highs.
Futures on the Standard & Poor’s 500 Index added 0.2 percent today. The equity gauge rose 0.2 percent on June 20 as drug makers rallied on merger activity and investors speculated economic growth will accelerate.