Asia up, Wall Street reaches higher

Hong Kong - Asian markets edged up on Monday following a record close on Wall Street at the end of last week, while analysts said data indicating sluggishness in the Chinese economy could prompt fresh stimulus from Beijing.

The dollar maintained Friday's Wall Street gains above ¥104 despite increasing tensions between Russia and the West over Ukraine.

Tokyo added 0.25%, Sydney gained 0.36%, Shanghai rose 0.33%, Hong Kong added 0.30% and Seoul was flat.

China said Monday that its official purchasing managers index (PMI) of manufacturing activity slipped to 51.1 last month. That is down from 51.7 in July, a more than two-year high and the first decline since February.

Anything above 50 points to growth and anything below suggests contraction.

The latest figure was just above the median 51.0 forecast in a survey of 10 economists by Dow Jones Newswires.

In a separate report, HSBC said its own August PMI came in at 50.2, well off the 51.7 seen the previous month.

However, while the figures were disappointing RBS economist Louis Kuijs said they could shepherd in more accommodating policy measures.

"Perceiving that its 7.5% (gross domestic product) growth target for 2014 is challenged, we expect the government to step up the roll-out of measures to support growth," Kuijs says in a note.

US dealers provided a useful lead, despite worries about a possible military confrontation between Kiev and Moscow after NATO said about 1 000 Russian troops were in Ukraine.

The S&P 500, which ended above 2,000 for the first time last week rose 0.33%, the Dow added 0.11% and the Nasdaq put on 0.50% to end at its highest level in 14 years on Friday.

While markets were up, investors are keeping an eye on events in Ukraine, where Russia President Vladimir Putin on Sunday raised the stakes by calling for the first time for statehood to be discussed for the restive east of the former Soviet state.

The remarks came just hours after the European Union gave Moscow, which the bloc accuses of direct involvement in the insurgency a week to change course or face new sanctions.

Currency traders remained upbeat, supporting the dollar against the yen, which is considered a safe bet in times of economic and political uncertainty.

In early Tokyo trade the greenback fetched ¥104.18, up from ¥104.06 in New York on Friday afternoon.
The euro bought $1.3128 and ¥136.77 against $1.3139 and ¥136.72.

On oil markets US benchmark West Texas Intermediate for October delivery eased 15 cents to $95.81 while Brent crude for October was down 4c to $103.15.

Gold traded at $1 286.39 an ounce at 04:20, from $1 285.00 late on Friday.