By Aileen Wang and Jungmin Jang
BEIJING/SEOUL (Reuters) - China continues to show signs of an economic revival as its factory activity expanded at the fastest pace in five months in May, raising some hopes across the region that Beijing's targeted measures to bolster growth are having an impact.
China's official Purchasing Managers' Index, which is geared towards bigger, state-owned firms, rose to 50.8 in May, from April's 50.4, the National Bureau of Statistics said on Sunday, beating market expectations of 50.6.
Encouraging China factory data and another closing record on Wall Street lifted Asian equities and commodities on Monday.
Tokyo's Nikkei led by way, rising 2.1 percent, while Australian shares added 0.3 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. Greater China markets were closed on Monday for a holiday.
"Risk appetite has risen mainly on bright economic data from China, but the direction for the month will likely depend on other economic data like U.S. jobs figures this week," said Hikaru Sato, a senior technical analyst at Daiwa Securities in Tokyo.
On China, a preliminary HSBC/Markit PMI issued late last month also showed the factory sector turning in its best performance in five months, although that reading remained below the 50-point level that suggests contraction in manufacturing activities.
All eyes will be on the release of the final HSBC PMI at 0145 GMT on Tuesday. This index favours smaller and private companies compared with the bigger and state-owned ones captured by the official PMI.
"The upside surprise was led by new orders index, which rose to a six-month high, reflecting the government's continued effort since mid-March to boost investment and construction activities," economists Jian Chang and Serena Zhou at Barclays said in a note.
A sub-index for new orders, a measure of foreign and domestic demand edged up to 52.3 in May from 51.2 in April, marking the highest level since last November.
China's manufacturing data bolstered market expectations that the world's second-largest economy is regaining strength as the government's pro-growth measures kick in. [MKTS/GLOB]
Beijing stepped up policy fine-tuning in recent weeks and has unveiled a slew of targeted measures this year to help shore up the economy, which has dipped to a 18-month low in the first quarter and is seen on track to post the weakest annual showing in 24 years.
China's cabinet announced fresh easing measures on Friday to help lower funding costs and reduce operating burdens for companies to give more support for the real economy, adding to previous moves that included hastening construction of railways and public housing.
Still, officials and economists warned that the downside pressure still exists.
In South Korea, Asia's fourth-largest economy and one of the leading manufacturing and export powerhouses, the HSBC/Markit manufacturing gauge slid to a seasonally adjusted 49.5 in May from 50.2 in April.
Trade data for May showed the nation's exports fell 0.9 percent in annual terms, below the polled estimate of a growth of 1.2 percent, although analysts cited the additional public holiday in May and the placement of holidays close together was one of the key factors.
In India, the HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, edged up to 51.4 in May from 51.3 in April, but that was slightly below the 51.6 median forecast in a Reuters poll.
In Indonesia, the HSBC Markit manufacturing activity surged to a record high of 52.4 in May, driven by unprecedented growth in new orders, but hopes were tempered after the country's trade balance slipped back into deficit in April after two consecutive months of surpluses.
(Additional reporting by Adriana Nina Kusuma and Nilufar Rizki in JAKARTA, Sumanta Dey in BANGALORE and Shinichi Saoshiro in TOKYO; Writing by Swati Bhat; Editing by Richard Borsuk)