Asia markets mixed in cautious trade

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Asia markets mixed in cautious trade

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Chinas PMI rose 0.5 points to 51.0 in February.

01 March,2012 09:10 am

Asian markets were mixed on Thursday as positive Chinese manufacturing data was tempered by Federal Reserve chief Ben Bernankes comments on the US economy.The euro extended gains against the major currencies after a record take-up of cheap loans from the European Central Bank by cash-strapped lenders, while Japanese exporters benefited from the yens continued weakening.Tokyo ended 0.16 percent, or 15.87 points, lower at 9,707.37 and Sydney lost 1.00 percent, or 42.9 points, to close at 4,255.6.In the afternoon Shanghai added 0.10 percent and Hong Kong lost 0.54 percent, while Manila advanced 1.27 percent. Seoul was closed for a public holiday.Data out of Beijing showed manufacturing activity expanded for the third straight month in February as exports picked up, easing concerns that the worlds number two economy was slowing down too quickly.The official purchasing managers index rose to 51 in February from 50.5 in January, with most sectors showing signs of improvement, the China Federation of Logistics and Purchasing said in a statement.A reading above 50 indicates industry is expanding.Markets had been growing increasingly concerned over manufacturing in China, which began shrinking at the end of last year as key export markets, especially the European Union, struggle.While the upbeat outlook for China provided some confidence, Bernankes cool assessment of the US economy injected caution into the market.The Fed chairman told a congressional hearing that flat incomes and still-high unemployment would likely limit growth this year to 2.25 percent, dampening recent bullishness following a string of positive data.Bernankes comments failed to inspire markets, Melbourne-based Chris Gore, a currency analyst at Go Markets, said in a note, according to Dow Jones Newswires.His economic assessment was far from encouraging and his comments provided little inspiration for those betting on another round of quantitative easing, Gore said, referring to the central banks policy of flooding markets with cash to boost liquidity.His comments also came after the Commerce Department said the US economy grew faster than initially believed in the fourth quarter of 2011, at an annual 3.0 percent.It said the improvement was due in part to positive contributions from consumer spending and private inventory investments.The dollar, which has rallied against the yen in the past two weeks, gained further on the news and stayed firm in afternoon Tokyo trade, buying 81.04 yen against 81.12 yen in New York late Wednesday.The euro was also stronger as dealers welcomed the second ECB liquidity exercise for banks, this time worth nearly 530 billion euros and easing pressure on weak eurozone member states borrowing costs.Wednesdays operation, the second after one in December, immediately lifted the euro to $1.3466 before it fell back sharply to end in New York at $1.3325.In Tokyo the common currency fetched $1.3347, while it also gained to 108.17 yen, compared with 108.11 yen in New York.On oil markets New Yorks main contract, light sweet crude for delivery in April, gained eight cents to $107.15 and Brent North Sea crude for April was up 12 cents at $122.78 in the afternoon.Gold was at $1,720.10 an ounce at 0610 GMT, compared with $1,788.20 late Wednesday.