BANGKOK – Asian stock markets rose Monday on the heels of a report showing a rebound in U.S. manufacturing, reinforcing the view that the slowdown in the world's No. 1 economy was only temporary.
Japan's Nikkei 225 index was 1 percent higher at 9,965.09, having breached the psychologically important 10,000 mark earlier in the day for the first time since May 5. Sentiment was lifted by optimism about the U.S. economy after manufacturing data for June from the Institute for Supply Management beat expectations.
Exporters were among the index's major gainers. Honda Motor Corp. jumped 3.2 percent. Toyota Motor Corp. was up 1.7 percent. Consumer electronics giant Panasonic Corp. moved 0.7 percent higher.
Companies that do well during times of economic expansion enjoyed broad gains. Japan's Komatsu Corp., a world leader in heavy equipment manufacturing, added 2.1 percent. Korean steel maker POSCO rose 0.9 percent.
Materials shares were also higher, including Hong Kong-listed Zijin Mining Group, China's biggest gold miner, which jumped 4.3 percent.
Meanwhile, rising crude prices helped lift oil-related shares. Hong Kong-listed China National Offshore Oil Corp., known as CNOOC, rose 2.3 percent.
Shares of Singapore-based Tiger Airways Holdings Ltd. plummeted 11.3 percent after Australian regulators grounded all Australian domestic flights of a Tiger subsidiary over safety concerns. Australia's Qantas Airways, one of Tiger's main competitors, soared 6.1 percent.
Elsewhere, South Korea's Kospi rose 0.9 percent to 2,145.30. Hong Kong's Hang Seng rose 1.8 percent to 22,796.37. Benchmarks in Australia, mainland China, Singapore, Taiwan and Indonesia also rose.
Thailand's SET index jumped 4.1 percent to 1,084.28 after the party backed by the country's deposed Prime Minister Thaksin Shinawatra won a landslide election victory. The poll came a year after the government crushed protests by Thaksin supporters with a bloody crackdown that culminated in some of the worst violence in Thailand in 20 years.
On Friday, the surprising rebound in the Institute of Supply Management's U.S. manufacturing capped a weeklong rally that left the Dow up 5.4 percent for the week, its best week in two years. The Dow rose 1.4 percent to 12,582.77. The Standard and Poor's 500 index gained 1.4 percent to 1,339.67. The Nasdaq composite added 1.5 percent to 2,816.03.
Also last week, Japan released data showing its industrial production posted the sharpest rise in nearly six decades in May. The improvement adds to signs that the world's No. 3 economy is rebuilding after a March 11 earthquake and tsunami damaged factories and caused parts shortages for manufacturers.
Those developments came after many economists had began lowering their estimates for U.S. growth in May after a string of negative reports on U.S. manufacturing and hiring. Some analysts continued to caution against too much optimism, given a host of other lingering threats: galloping inflation in China, the European debt crisis and high oil prices.
"I think the environment that we are in — there are still a lot of headwinds as far as equities go. I suspect this relief rally is going to be short-lived," said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. "If growth slows any further, stocks are not going to be doing well."
Benchmark crude for August delivery was up 10 cents to $95.05 in electronic trading on the New York Mercantile Exchange on Monday. The contract declined 48 cents to settle at $94.94 per barrel on the Nymex on Friday.
In currencies, the euro rose to $1.4527 from $1.4511 in late trading in New York on Friday. The dollar weakened to 80.75 yen from 80.84 yen.
