Asian stocks rose on Wednesday as investors cheered a manufacturing rebound in China and rosier-than-expected Australian growth, which halted the yen's advance towards a 15-year peak against the US dollar.
Asian stocks shrugged off a flat lead from Wall Street, reflecting belief that Asia's economic recovery could hold up relatively well compared to the United States, which faces the possibility of a double-dip recession.
Leading European stocks opened 0.4 per cent higher, while S&P 500 futures were flat.
China's manufacturing economy regained some momentum in August, while Australia's economy grew at the fastest pace in three years last quarter as households spent far more than expected while exports enjoyed an Asian-driven boom.
"The market is still concerned about the global recovery momentum, but based on fundamentals, some funds will flock from developed countries to Asia," said Daniel Chan, chief economist and wealth management strategist BWC Capital Markets in Hong Kong.
The MSCI index of Asia Pacific stocks outside Japan rose 1.5 per cent, led by commodity-related shares due to optimism about Chinese.
But the MSCI Asia index is still down about 2.5 per cent so far this year, compared to a 6.6 per cent drop on the MSCI world-wide index, underscoring Asia's economic resilience.
Analysts expect increased volatility in Asian stock and bond markets as markets brace for a slowdown in the world economy.
Japan's Nikkei average rose 1.2 per cent after briefly hitting a 16-month low, getting a boost from the Chinese data while technology shares crawled higher in reaction to a sharp fall the day before.
South Korean stocks gained 1.3 per cent, propelled by auto and retail counters including Kia Motors and Lotte Shopping, but key technology shares continued to fall amid persisting concern over global economic recovery.
"The market is being helped by gains in defensive, domestic consumption issues as investors seek safer bets," said Lee Sun-yeb, a market analyst at Shinhan Investment Securities.
US Treasury yields rebounded slightly after the benchmark 10-year yield recorded its largest monthly drop in August since late 2008, when markets were reeling from the Lehman Brothers collapse.
Reuters