BANGKOK – Asian stock markets perked up Wednesday after U.S. service companies, which employ most of the American workforce, grew at a slightly faster pace in May.
The result provided some relief for markets following a slew of dismal economic data, including a disappointing U.S. jobs report and a slowdown in Chinese manufacturing, that intensified fears of a global economic recession.
On Tuesday, the Institute for Supply Management said its index of non-manufacturing activity edged up to 53.7 last month from an April reading of 53.5. That is important because U.S. service companies employ roughly 90 percent of American workers — and it marked the 29th straight month of expansion for the sector.
But while a reading above 50 indicates expansion, analysts remained cautious about reading too much into the latest figure.
"Any improvement is good and growth is growth but 53.7 still falls short of the 55 mark that we've always regarded as the dividing line between earnest growth and aimless drifting," analysts at DBS Bank Ltd. in Singapore wrote in an email.
"Given the downside surprises in every other data point that comes to mind over the past month, the May outcome was taken well by the markets."
Japan's Nikkei 225 rose 1.6 percent to 8,512.43 and Hong Kong's Hang Seng added 1.1 percent to 18,457.94. Australia's S&P/ASX 200 edged 0.2 percent up to 4,050.
Benchmarks in Singapore, Indonesia and Taiwan also rose, but those in mainland China fell. Markets in South Korea were closed for a public holiday.
Some analysts said investors were hanging on to hopes for action by central banks and other authorities to stimulate growth, including a new round of "quantitative easing" by the U.S. Federal Reserve. That's when the Fed buys Treasury bonds to drive interest rates lower.
"Right now what is keeping the market alive is just accommodative policies from governments around the world," said Lee Kok Joo, head of research at Phillip Securities in Singapore.
"If we look at market activity closely, the volume doesn't seem to be so strong. There are still a lot of people who are not believers yet who are just staying on the sidelines, waiting for clearer visibility."
That might come June 17, when Greece holds elections that could determine whether the country will leave the euro currency union. A messy exit from the currency bloc by Greece would be sure to roil financial markets.
Some traders also said a decision by the Reserve Bank of Australia on Tuesday to lower its benchmark interest rate by a quarter percentage point to 3.5 percent stoked hopes that central banks elsewhere would do the same.
Hong Kong-listed blue chip stocks performed strongly. China Mobile Ltd. rose 2.3 percent and Henderson Land Developer gained 4.4 percent. CNOOC, also known as China National Offshore Oil Corp., added 3.9 percent.
Japanese vehicle makers recouped ground lost in recent sell-offs. Mazda Motor Corp. jumped 5.3 percent, Yamaha Motor Co. added 4 percent and Isuzu Motors Ltd. rose 3.9 percent.
Also Tuesday, finance ministers and central bank presidents from the world's seven wealthiest nations held an emergency conference call to discuss ways to deal with Europe's debt crisis. But the call didn't yield a blueprint for action, at least not publicly.
On Wall Street, trading volume was light Tuesday, and the stock moves were small. The Dow Jones industrial average rose 0.2 percent to 12,127.95, trading within a range of 75 points — one of the narrowest of the year. The Standard & Poor's 500 index closed marginally higher at 1,285.50. The Nasdaq composite index rose slightly to 2,778.11.
Benchmark oil for July delivery was up 66 cents to $84.97 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 31 cents to settle at $84.29 in New York on Tuesday.
In currencies, the euro rose to $1.2502 from $1.2446 late Tuesday in New York. The dollar rose to 78.91 yen from 78.73 yen.
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