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* Technology boosts stocks in South Korea, Taiwan
* Robust China manufacturing data seen lifting Europe
* China cbank allays tightening fears; boosts Shanghai, HK
* Foreign buying remains strong in the region
By Umesh Desai
HONG KONG, April 1 (Reuters) - Asian stocks rose to an
11-week high on Thursday as China's manufacturing industry
picked up and foreign buying boosted the technology-heavy
markets of Taiwan and South Korea.
The Nikkei average rose to a new 18-month closing high half
with the yen's recent downtrend boosting exporters. Traders
predicted more gains for the benchmark in the new quarter in
spite of signs of strains on technical charts.
China's manufacturing data is expected to boost European
shares. STOXX Europe 50 <STXEc1> futures, Germany's DAX futures
<FDXc1> and France's CAC-40 futures <FCEc1> were up 0.6 to 0.9
percent.
The dollar was steady against the yen compared to late U.S.
trading on Wednesday at 93.47 yen <JPY=>, having touched a
three-month high of 93.65 yen earlier in the day.
MSCI's Asia-Pacific ex-Japan index <.MIAPJ0000PUS> was up
1.1 percent, after hitting its highest since mid-January. This
marks a solid start to the second quarter after the benchmark
gained 1.5 percent in Jan-Mar The Thomson Reuters index for
regional shares <.TRXFLDAXPU> was up 1.4 percent.
Analysts say Asia was merely in catch-up mode. Technology
and consumer durables stocks were the big gainers as foreigners
bought stocks that have underperformed this year.
"Our markets have underperformed and I think it is
premature to worry about too much money coming into the
region," said Geoff Lewis, head of investment services at JP
Morgan Asset Management.
Compared with Asian shares, world stocks measured in the
MSCI All-Country World Index <.MIWD00000PUS> were up 2.7
percent in the first quarter, while emerging market shares
<.MSCIEF> were up 2 percent.
The mood among investors was boosted by two business
surveys which showed China's manufacturing moved up a gear in
March as orders climbed, pointing to brisk first-quarter GDP
growth.
HSBC's China Purchasing Managers' Index, or PMI, showed
first-quarter manufacturing output expanded at the briskest
clip in the survey's six-year history.
The official purchasing managers' index rose to 55.1 in
March from 52.0 in February, beating the market consensus of
54.5.
The technology-dominated markets of Taiwan and South Korea
were among the leading performers with foreign buying boosting
the stock markets in Seoul and Taipei because of earnings
expectations.
"Foreign investors coming in now seem to be long-term
funds. Normally they had been more defensive players, but their
more active buying is actually lifting the broader market,"
said Choi Kwang-hyeok, a market analyst at Hanwha Securities.
Funds tracker EPFR Global said investor appetite for
exposure to emerging markets took global emerging markets
equity fund flows to a 10-week high and flows into emerging
bond funds to their second best week ever in the period to
March 24.
The stock market benchmarks in Taiwan and South Korea
closed at a 10-week high.
Although the data released in China triggered expectations
of 11 percent plus growth in the first quarter which could lead
to tightening by authorities, those fears were kept in check by
comments from the central bank reaffirming its monetary stance.
In a statement released a day after the quarterly meeting
of its monetary policy committee, the People's Bank of China
vowed to maintain appropriate credit growth which took stocks
in Shanghai and Hong Kong to their highest in over two months.
The Shanghai Composite index <> was up 1.1 percent
while in Hong Kong the China Enterprises Index <.HSCE> of top
locally listed mainland Chinese stocks was up 1.8 percent at
12,618.
Goldman Sachs has forecast more gains for the China
Enterprise benchmark with a target of 15,000 or 20 percent
above the current level.
"We sense that Chinese equities have fallen off investors'
radars somewhat, positioning is light, and sentiment is, at
best, skeptical, making us all the more keen to get involved,"
a report said while highlighting robust economic growth and
"undemanding" price-earnings multiples.
Materials also received a boost from M&A activity in
Australia's sizzling commodities sector.
Australia's Lihir Gold <LGL.AX> surged by a third to a
two-year high after rejecting a takeover offer from the
country's top gold miner, Newcrest Mining <NCM.AX>. The deal
followed a bid on Wednesday for Macarthur Coal <MCC.AX> from
Peabody Energy <BTU.N>, which was also rejected.
In southeast Asia, strong foreign buying lifted stock
markets in the two biggest economies.
Thailand's benchmark stock market index <> hit a
21-month high while Indonesia's benchmark index <> was up
1.8 percent within sight of the record high hit on Jan. 14,
2008.
Investors are awaiting non-farm payrolls data due in the
United States on Good Friday, a holiday for most markets.
Analysts polled by Reuters forecast a 190,000 job gain in
March payrolls, which would be the second monthly increase
since the recession began in December 2007. []
(Additional reporting by Jungyoun Park in SEOUL; Editing by
Jan Dahinten)
