Asian stocks rally as China's factory bounce lifts confidence

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TOKYO: Asian stocks powered higher on Monday as positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks boosted sentiment, ...

TOKYO: Asian stocks powered higher on Monday as positive Chinese factory gauges and signs of progress in Sino-U.S. trade talks boosted sentiment, although another defeat for British Prime Minister Theresa May's Brexit deal added to sterling's woes.

The markets took heart after China's official purchasing managers' index released on Sunday showed factory activity unexpectedly grew for the first time in four months in March. "In particular, the larger-than-expected tax and fee cuts and improving financial conditions have likely helped boost business sentiment in the manufacturing space."

"Hopes that the United States and China would reach an agreement on trade as early as this month are enabling stocks to begin the quarter on a positive tone." Sterling took its latest knock after British lawmakers rejected Prime Minister May's Brexit deal for a third time on Friday, sounding its probable death knell and leaving the country's withdrawal from the European Union deeper in turmoil.The Australian dollar advanced 0.35 percent to US$0.7122. The Aussie is sensitive to shifts in the economic outlook for China, the country's main trading partner.Safe-haven government bonds retreated as risk aversion in the broader markets eased.

The slide had pushed the 10-year yield below the three-month rate for the first time since 2007 late last month.

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