(Updates prices, adds analyst comment)
By Daniel Magnowski
SINGAPORE, March 1 (Reuters) - Asian stocks rose in early
trade on Tuesday, tracking U.S. shares which gained on
optimistic remarks from influential investor Warren Buffett,
while Chinese manufacturing growth slowed to a six-month low.
Japan's benchmark Nikkei average climbed 0.7 percent
and the broader Topix index rose 0.9 percent, while
Australian shares also gained.
Buffett, chairman of Berkshire Hathaway Inc , told
shareholders in his widely read annual letter that he saw the
need for "major acquisitions," a sign stocks may be cheap.
Chinese manufacturing growth slowed in February, according
to an official survey, as the government's sustained campaign to
tame inflation weighed on industrial activity.
High global commodity prices complicated the task of
monetary tightening, pushing a gauge of industrial input prices
to a three-month high in China's official purchasing managers'
index.
The overall PMI, which is designed to provide a snapshot of
conditions in the manufacturing sector, fell to 52.2 in February
from 52.9 in January, the China Federation of Logistics and
Purchasing said.
"Inflation pressures are rising but economic activity is
slowing. Slower economic growth is good for cooling inflation,"
said Wang Hu, economist at Guotai Junan Securities in Shanghai.
China's battle with inflation is a key market factor, and
some foreign investors may favour Japanese stocks, analysts
said.
"U.S. and European investors have been the main players in
the Japanese market. But Asian investors have joined in as Japan
is one of the few countries with a low risk of rate hikes," said
Shun Maruyama, chief strategist at Credit Suisse.
"They are buying Japanese stocks on a process of elimination
as Japan has more tolerance for higher oil prices than other
Asian countries."
Crude oil traded close to $120 per barrel last week, its
highest in more than two years, largely on fears that political
upheaval in Libya would spread across oil-producing nations in
the Middle East, but Saudi Arabia calmed the market with extra
supply.
Brent crude was steady around $112 per barrel, while
U.S. crude for delivery in April rose slightly to $97.07
per barrel. Gold , which in February recorded its biggest
monthly gain since August as worried investors sought safety,
was up around $1 to 1411.70 per ounce.
The dollar index , which tracks its performance
against a basket of major currencies, hit a 3-1/2 low of 76.756,
before recovering slightly to 76.883.
The British pound hit its highest in four months
versus the dollar, on expectations the Bank of England will
raise rates, and that high oil prices will retard U.S. economic
growth.
Investors are awaiting some key U.S. economic events. This
week will see Fed Chairman Ben Bernanke's testimony at the
Senate Banking Committee on Tuesday and U.S. jobs data on
Friday.
(Editing by Ron Popeski)
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