Chinese manufacturing boosts Asian markets

Guy Bentley
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Asian markets are on the up after the third successive pick-up in the Chinese manufacturing purchasing managers' index (PMI).

PMI rose to 50.8 in May, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. The new data may add further weight to the view that the world's second largest economy is not about to experience the slowdown in growth many had feared.

"With further measures to support small firms announced last Friday, including targeted RRR cuts, the outlook for the sector no longer looks as downbeat as it did earlier this year", said China economist at Capital Economics, Julian Evans-Pritchard.

The pace of government stimulus measures, such as railway investment, has also been increased this year. However, China's faultering property sector may be a drag on growth in future quarters.

On Thursday, the European Central Bank is expected opt for monetary easing via a cut in the deposit rate to less than zero. Advances on Wall Street have been modest as investors await the release of US non-farm payrolls on Friday.