Chinese stocks rallied while other Asian markets erased declines after factory activity in the world’s second-largest economy improved more than analysts forecast.
The offshore yuan strengthened by more than 0.4%, while Australia’s currency, which is sensitive to China’s outlook, reversed an earlier decline to climb about 0.2%.
The Hang Seng China stock gauge rallied more than 3% as the gauge of China’s manufacturing activity climbed to the highest level in more than a decade. An Asian equity benchmark changed course and rose by the most in a month, while futures for the S&P 500, the Nasdaq 100 and Euro Stoxx 50 all pared losses.
The better-than-expected economic news from China comes as investors await developments in the lead-up to the National People’s Congress. 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 be buoyed on expectations of a solid Chinese demand recovery,” said Wei Liang Chang, a strategist at DBS Bank Ltd.
