South Korea shares jump on recovery hopes from Chinese data

South Korea led gains across Asia's emerging stock markets on Monday as an improvement in Chinese factory data calmed nerves over a ramp up in US-China tensions ahead of trade talks at the end of the week.

Monday's data showed this year's fall in Chinese factory prices slowed in July.

Allied with stronger-than-expected export numbers on Friday, analysts said industrial activity was climbing back to pre-COVID-19 levels, boosting trade-sensitive markets in the region and sending South Korean shares to a more than two-year high.

Chinese stocks were more than 1pc higher, ahead of an update due this weekend on the US-China trade deal, which follows President Donald Trump deciding to ban WeChat and TikTok last week and announcing sanctions on senior Chinese and Hong Kong officials.

Morgan Stanley said in a note the meeting on Saturday was the main source of risk for emerging markets this week.

Trading was lighter than usual due to holidays in Japan and Singapore, and moves were tight in the region's currencies after gains in the past month due to weakness in the US dollar.

Both Malaysia's ringgit and Indonesia's rupiah eased around a quarter of a percent.

In the Philippines, shares rose 1.5pc late in the session on hopes that the capital, Manila, could reopen as planned by the middle of next week even as COVID-19 cases spike.

Jennifer Lomboy, a fund manager at First Metro Asset Management, said the jump followed "optimism on the reopening of economy as the Chairperson of the National Task Force on COVID-19 said Metro Manila is ready for less stringent quarantine measures."

Meanwhile, upbeat earnings from drugmakers helped Indian shares extend gains into a fifth session.

Malaysia was the outlier, falling 0.5pc as the country's top glove makers fell sharply after a recent run of gains.