In This Article:
* Shanghai Composite and blue chip index jump 2%
* S&P 500 futures wobbly amid U.S. stimulus doubts
* USD/CNH leaps after PBOC tweaks FX policy
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Tom Westbrook
SINGAPORE, Oct 12 (Reuters) - Chinese stocks led Asian markets higher on Monday as investors bet on a steady recovery for the world's no. 2 economy, though caution about the fate of U.S. stimulus kept the dollar firm and a central bank policy tweak unwound some of the yuan's gains.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8% to 2-1/2-year highs, buoyed by a 2% gain in Chinese blue chips and a 1.5% rise by Hong Kong's Hang Seng index. Japan's Nikkei slipped 0.3% as investors fretted about corporate earnings.
"If capital is moving on relative growth rates, then China is looking quite attractive," said Chris Weston, head of research brokerage Pepperstone in Melbourne. Equities are cheap, yields advantageous and the outlook solid, he said.
"From a virus perspective as well, we're seeing concerns in Europe, while China is considered a quasi-safe haven."
China has returned from an eight day Mid-Autumn festival with investors encouraged by a robust rebound in tourism and ebbing coronavirus cases.
Qingdao city said on Monday it will conduct COVID-19 tests for the entire population of more than 9 million people over five days after small number of new cases.
Elsewhere, in the U.S. midwest, infections are at record levels and the World Health Organization is urging fresh curbs for Europe.
Coronavirus aid plans in the United States are also in disarray, with the Trump administration on Sunday calling on Congress to pass a stripped-down relief bill while talks on a more comprehensive proposal were again at an impasse.
S&P 500 futures wobbled either side of flat in the Asia session, while European futures edged higher.
"The economic fallout of COVID-19 has accelerated the relative decline of the U.S. as the world's economic engine," said ANZ chief economist Richard Yetsenga. "It is also increasing the centrality of Asia - and particularly, of China."
Chinese blue chips have gained nearly 17% this year, compared with an almost 8% gain by the S&P 500. Foreigners' buying of Chinese government bonds hit its fastest pace in more than two years last month.
YUAN WOBBLES
In currency markets, a 0.4% drop in the yuan dragged the China-sensitive Australian dollar lower and underpinned small but broad gains for the dollar against other majors.