* Recovery hopes in place; China exports show signs of life
* Markets relieved ahead of GM bankruptcy filing
* MSCI Asia ex-Japan stocks index at 8-month high
* Crude hits $67, latching on to equity strength
* Gold at 3-month high as liquidity abounds
By Kevin Plumberg
HONG KONG, June 1 (Reuters) - Asian stocks and the
Australian dollar shot to eight-month highs on Monday after a
gauge of China's manufacturing activity offered fresh evidence
of a recovery in the world's third-largest economy.
Growing optimism that the worst of the global downturn is
over offset long-expected news that General Motors Corp <GM.N>
will file for bankruptcy later in the day in a
government-managed process that will pump another $30 billion
in U.S. taxpayers' money into the ailing automaker.
[]
U.S. stock futures <SPc1> added to gains as details of the
bankruptcy filing emerged with no major downside surprises,
while Treasury futures <TYc1) extended modest declines.
U.S. oil futures rose to the highest since early November
at $67 a barrel, as investors shrugged off surprisingly soft
South Korean export figures for May and concentrated on the
China numbers, which also showed new export orders growing for
the first time since June 2008. []
"We expect manufacturing activity will continue to expand
in the coming months, supported by the roll-out of the
governments stimulus. Some bright spots have emerged in China's
heavy industries," Jing Ulrich, managing director and chairman
of China equities at JPMorgan in Hong Kong, said in a note.
S&P 500 futures <SPc1> were up 0.6 percent, extending
earlier gains made on the Chinese manufacturing report.
Hong Kong's Hang Seng index <> and China's Shanghai
composite <> led Asian equity markets higher, rising 1.5
percent and 2.2 percent, respectively.
Japan's Nikkei share average <> rose 1.2 percent, with
trading houses and industrial sectors performing well.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> advanced 1.4 percent to its highest since
October 2, having risen 55 percent since a global equity rally
began on March 9.
The materials and energy sectors outperformed on Monday, as
they have since the rally started.
News over the weekend that China would raise retail diesel
and gasoline prices by 6-7 percent supported shares of domestic
refiners, with PetroChina <0857.HK> climbing 3.5 percent.
V-SHAPED RECOVERY
Optimism about the region as well as continued weakness in
the U.S. dollar because of lingering concerns about U.S. fiscal
health pushed up emerging Asian currencies across the board.
The Australian dollar rose 0.6 percent to US$0.8053 <AUD=>,
gaining some 16 cents in the last three months. The currency
has become a proxy for global growth prospects because of
Australia's big commodity exports to China.
China's official purchasing managers' index for May fell to
53.1 from 53.5, staying above high water mark of 50, which
separates expansion and contraction, for the third month in a
row and fueling hopes that China will lead a global recovery.
The British pound climbed 0.3 percent to US$1.6235 <GBP=>,
having touched the highest since November 3.
The pound has benefitted from acute weakness in the U.S.
dollar, as investors leave its deep liquidity for higher
returns elsewhere.
Gold has also been a target. It hit a three-month high on
Monday in the spot market of $983.15 an ounce <XAU=>, creeping
closer to the psychologically significant $1,000 price.
"Gold is rising because the dollar is weak, the economy is
stabilising, and interest rates are low," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
"There is too much hot money around as governments are
printing money, and one option is to put that into stocks and
the other is to gold," he said.
U.S. crude for July delivery <CLc1> rose 0.9 percent to
$66.92 after earlier hitting a fresh seven-month high of $67.
Stock market optimism and sustained hope for a global economic
recovery have supported the market's best monthly gains in a
decade.
"My thinking is that most of the commodity markets, the
base metals as well as oil, have moved to factor in economic
recovery, and probably a fairly decent 'V'," said Commonwealth
Bank of Australia commodity strategist David Moore.
The rally in equities and general optimism for the global
economy put U.S. Treasuries under pressure.
The yield on the benchmark 10-year note <US10YT=RR> rose to
3.51 percent from 3.47 percent late on Friday in New York.
The 10-year futures <TYc1> were down 0.3 percent after
extending modest losses on the GM news, but still above the
six-month low hit last Thursday.
(Additional reporting by Chikako Mogi in TOKYO)
(Editing by Kim Coghill)
