Share in Asia gain on weekend China rate cut, upbeat manufacturing gauge

Investing.com - Shares in Asia gained on Monday on China cutting interest rates at the weekend on the release of upbeat assessments of manufacturing in the country.

The Nikkei 225 rose 0.31% at the break while the Shanghai Composite was up 0.29% and the Hang Seng index gained 0.25%.

The HSBC China final manufacturing index for February rose to 50.7 into the expansion zone and above the flash reading of 50.1.

On Saturday, the People's Bank of China cut its benchmark interest rate by a quarter percentage point to 5.35%.

Also at the weekend, the February China Federation of Logistics and Purchasing (CFLP) manufacturing PMI improved for the first time in seven months, despite the Chinese New Year holiday, but remained just below the 50 mark, indicating that the sector contracted for a second straight month. The index rose to 49.9 in February from 49.8 in January. China is the world's No. 2 oil importer.

On Monday, Australia's AI Group PMI fell 3.6 points to 45.4 in February, data released Monday showed. Also, the Melbourne Institute inflation gauge was flat in February, compared to a 0.1% expectation found in January. Business inventories in the fourth quarter in Australia fell 0.8%

In Japan, CAPEX data for non-financial firms rose 2.8% in the fourth quarter.

U.S. stocks were lower after the close on Friday, as losses in the Technology, Health Care and Industrials sectors led shares lower.

At the close in New York, the Dow Jones Industrial Average fell 0.45%, while the S&P 500 index fell 0.30%, and the NASDAQ Composite index declined 0.49%.

Last week, Federal Reserve Chair Janet Yellen said that if the economy keeps improving as the bank expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.

In the week ahead, Friday’s U.S. employment report will be closely watched, while central banks in Australia, Canada, the U.K. and the euro zone are all to hold monetary policy meetings.

On Monday, the U.K. is to publish private sector data on house price inflation, as well as what will be a closely watched report on manufacturing activity.

The euro zone is to produce preliminary data on consumer prices and a report on unemployment.

In the U.S., the Institute of Supply Management is to report on manufacturing activity.