In This Article:
(China's Caixin factory PMI hits best level in almost decade)
* Australia shares hit four-week low ahead of policy rate
* Dollar hits two-year trough as Fed commits to easy policy
* Despite stock pullback, S&P posts best August since 1986
By Paulina Duran and Alwyn Scott
SYDNEY/NEW YORK, Sept 1 (Reuters) - Asian stocks edged higher on Tuesday after strong readings on China's vast manufacturing sector offset the weak lead from a softer Wall Street session.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2%, to regain some ground it had lost on Monday.
The Hang Seng Index in Hong Kong traded 0.18% higher while the Shanghai Composite also recovered early losses to stand 0.1% higher. Japan's Nikkei 225 erased early losses to trade flat.
The Caixin/Markit Manufacturing Purchasing Managers' Index(PMI) showed China's factory activity expanded at the fastest clip in nearly a decade in August, bolstered by the first increase in new export orders this year.
"What we are seeing here is the slow but choppy export recovery that is taking a bit longer than maybe some market participants thought it would - and that's because markets remain largely out of sync," said Daniel Gerard, senior multi asset strategist at State Street Global Markets, based in Singapore.
"September is also going to be a choppy recovery, and until we get closer to more news about a vaccine it's going to remain that way."
Taiwan stocks gained 0.5% after the United States said on Monday it was establishing a new bilateral economic dialogue with the country, an initiative it said was designed to support Taipei.
Australia's S&P/ASX 200 was an outlier, declining 2.4% to four-week lows on rising diplomatic tensions between Canberra and Beijing.
On Wall Street, the Dow Jones Industrial Average and the S&P 500 ended in the red overnight, while the Nasdaq rose solidly.
The S&P gained more than 7% for the month to notch its best August since 1986 in what is traditionally a softer month for stock performance.
Wall Street declines overnight were mostly caused by month-end portfolio rebalancing "rather than a new trend in equities," said Rodrigo Catril, senior FX strategist at NAB Market Research in Sydney.
The Nasdaq fared even better than the S&P for the month, up nearly 10% as it rallied for a fifth straight month.
In currencies, the dollar dropped against a basket of major currencies early on Tuesday. The dollar index fell 0.4%, with the euro up 0.5% to $1.1993.
The Japanese yen strengthened 0.3% versus the greenback at 105.63 per dollar, while Sterling was last trading at $1.3410, up 0.3% on the day.