* China exports show signs of life, feed recovery story
* 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
(Repeats to more subscribers without changes in text)
By Kevin Plumberg
HONG KONG, June 1 (Reuters) - Asian stocks and the
Australian dollar jumped 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.
Major European equities markets were expected to open as
much as 1.5 percent higher, according to financial bookmakers,
on the back of bullish views on energy and mining stocks.
Growing optimism that a nascent recovery may be sustainable
offset long-expected news that General Motors Corp <GM.N> will
file for bankruptcy later in the day in a process that will
pump another $30 billion of U.S. taxpayers' money into the
ailing automaker. []
U.S. stock futures <SPc1> were up 0.6 percent, extending
gains after details of the bankruptcy filing emerged with no
major surprises, while Treasury futures <TYc1) extended modest
declines.
In another bankruptcy case involving a U.S. car maker, a
judge cleared the sale of nearly all of Chrysler's assets to a
group led by Italy's Fiat <FIA.MI>.
"Now the hard part begins, which is making GM and Chrysler
competitive. If they don't do that, then we'll be doing this
all over again in a few years," said Christopher Richter, auto
analyst with CLSA Asia Pacific Markets in Tokyo.
U.S. oil futures rose above $67 a barrel, their highest
level since early November, as investors shrugged off
surprisingly soft South Korean export figures for May and
concentrated on China data showing new export orders growing
last month 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.
China's official purchasing managers' index for May fell to
53.1 from 53.5 in April, but stayed above 50, which separates
expansion and contraction, for the third month in a row and
fueled hopes China will lead a global recovery.
Hong Kong's Hang Seng index <> and China's Shanghai
composite <> led Asian equity markets higher, rising 2.8
percent and 3.1 percent, respectively.
Japan's Nikkei share average <> ended 1.6 percent
higher, with trading houses and industrial sectors performing
well.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> advanced 2.2 percent to its highest level since
Oct. 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 4.2 percent.
TOO MUCH MONEY?
Steady flows of portfolio investment into Asia as well as
continued weakness in the U.S. dollar because of lingering
concerns about the ballooning fiscal deficit in the United
States pushed emerging Asian currencies up across the board.
The Australian dollar rose 0.6 percent to US$0.8050 <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.
Gold has benefitted from the falling dollar. It hit a
three-month high on Monday 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 1.2 percent to
$67.12. 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 in Sydney.
The rally in equities and general optimism for the global
economy put U.S. Treasuries under pressure.
U.S. debt has also been hurt by concerns about the U.S.'s
fiscal health, although Treasury Secretary Timothy Geithner
tried to reassure the country's biggest foreign owner of
Treasuries -- China -- that its investments were safe.
[]
The yield on the benchmark 10-year note <US10YT=RR> rose to
3.51 percent from 3.47 percent 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.
