Asian stocks higher as China PMI lifts Hong Kong, Shanghai

Asian markets mostly rose Thursday, with another weak reading on Chinese manufacturing lifting Hong Kong and Shanghai on hopes for further stimulus while a weaker yen provided a boost to Japanese exporters.

Wall Street pushed higher on the back of strong house sales data, which also supported the dollar, while the euro struggled under worries about Greece's future in the eurozone.

Tokyo climbed 0.34 percent by lunch, Hong Kong added 0.90 percent, Shanghai rose 0.32 percent and Seoul gained 0.55 percent while Sydney was flat.

HSBC said its preliminary purchasing managers index (PMI) of manufacturing activity in China had slipped to a 12-month low in April, the latest data to show the world's number two economy slowing.

The reading of 49.2 is well down from the 49.6 seen in March and well below the 50 break-even point that separates growth from expansion in the sector.

However, the result led Hong Kong and Shanghai shares higher on hopes the Chinese authorities will introduce more monetary easing measures.

Hopes for continued loosening have seen mainland investors pile into equities, doubling Shanghai's value over the past year and now helping Hong Kong's Hang Seng Index to levels not seen since the end of 2007.

"I expect Chinese indices to continue their outperformance in the coming few months," Stan Shamu, a markets strategist in Melbourne at IG Ltd., wrote in an email to clients, according to Bloomberg News.

"China has a double equity positive: monetary and fiscal stimulus coupled with fundamentals in the likes of the H-shares and the Hang Seng that are cheap compared to historical measures and regional peers. The mass inflows into equities look like continuing almost unabated."

H-shares are shares of firms incorporated in China that are listed in Hong Kong.

In New York the Dow rose 0.49 percent, the S&P added 0.51 percent and the Nasdaq gained 0.42 percent.

US dealers' confidence was lifted after data showed existing-home sales rebounded in March to the fastest pace in 18 months, pointing to solid spring sales this year.

The news gave a boost to the dollar and in early Asian trade it was buying 120.01 yen, up from 119.89 yen in New York and much higher than the 119.54 yen in Tokyo earlier Wednesday.

The euro bought $1.0798 and 128.41 yen against $1.0725 and 128.58 yen in US trade.

The single currency is slowly heading lower as Greece battles to raise cash to service its debts, while also haggling with creditors over reforms to its bailout.

With eurozone finance ministers due to meet in Latvia's capital Riga at the end of the week, analysts warn Athens may have only weeks left before defaulting and possibly exiting the eurozone unless it reaches a deal with the EU and IMF to unlock 7.2 billion euros in remaining bailout loans.

Oil prices rose, with US benchmark West Texas Intermediate for June delivery gaining 26 cents to $56.42 while Brent crude for June added 25 cents to $62.98.

Gold fetched $1,187.10 against $1,199.00 late Wednesday.