Asia shares extended their rally on Tuesday as factory activity surveys from China and the United States boosted investor confidence, triggering the largest one-day sell-off in the US Treasury market in nearly three months, reports NDTV Online.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent to a seven-month high after rallying more than one per cent in the previous session.
Australian shares gained 0.8 per cent while Japan's Nikkei advanced 0.4 per cent, extending its gains for a third session.
Wall Street shares jumped on Monday, with the S&P 500 and Dow Jones Industrial Average both rising more than one per cent, with the Dow lifted by sharp gains in Caterpillar Inc and Boeing Co.
Investors cheered US data overnight showing improvements in manufacturing activity last month and construction spending for February, which overshadowed an unexpected drop in retail sales.
The upbeat readings added to earlier data showing China's manufacturing sector surprisingly returned to growth for the first time in four months in March in a sign government stimulus steps were starting to be felt.
The rare bright news for the global economy comes in the wake of persistent worries over cooling demand across the world, with the Sino-US tariff dispute, slowing trade and corporate profits prompting investors to dump risk assets over the past several months.
"The market is reacting to the improvement of the sentiment in China. Many investors are buying in anticipation of a rise in shares," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
"But thinking about how things really are, at the end of the week (US) jobless claims will be released and it's true that individual consumption, which accounts for 70 per cent of gross domestic product, hasn't been good. I think that has to be taken into account," Fujito said.
The encouraging data on manufacturing activity in the world's two biggest economies led to a wobbly start to the US bond market, with the US benchmark 10-year Treasury note yields booking their largest single-day jump since Jan. 4.
The US 10-year Treasury yield overnight jumped to a more than one-week high of 2.502 per cent, moving off a 15-month low of 2.340 per cent touched on March 25.
The rise pushed the yield curve between three-month US Treasury bills and 10-year notes further into positive territory, after being inverted for a week until last Friday.
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