Asian stocks up as markets shrug off China data

Asian stocks rose on Monday on strong corporate earnings and shrugged off news that Chinese manufacturing shrank in July amid investor hopes that the world’s fastest growing major economy will expand strongly. The high-yielding Australian dollar rose, helped by a rise in stocks. The US dollar hit a three-month low against a basket of currencies, hurt by persistent worries that the US economy’s recovery is losing steam. HSBC’s China Purchasing Managers’ Index fell below the boom-bust line of 50 in July for the first time since the depths of the global downturn in March 2009. The index dropped to 49.4 from 50.4 in June. A figure above 50 denotes expansion. HSBC played down the drop, which coincides with signs of weakness in the United States. Although the index pointed to a month-on-month contraction in manufacturing, it was still consistent with annual growth in Chinese industrial production of 11-13 percent, HSBC said.

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