Asian stocks higher on improved Chinese data, Greece talks

Asian stocks closed higher on Tuesday thanks to positive data in China alongside hopes that Greece will strike a deal with its creditors.

The Nikkei 225 rose 1.86% despite a decline in manufacturing purchasing manager index (PMI). According to Markit, manufacturing PMI fell to 49.9 in June from 50.9 the month before.

Amy Brownbill, economist at Markit, said: "Production growth slowed to a fractional pace, while new orders contracted for the third time this year so far. Subsequently, employment growth was subdued, while buying activity declined."

The Japanese telecommunications group Softbank gained 1.45% following news it will invest $20bn in solar-energy projects in India. It will partner with Taiwan's Foxconn and India's Bharti Enterprises with the aim to generate 20WG in the country.

Its founder Masayoshi Son said: "With this partnership, our goal is to create a market-leading clean energy company, to fuel India's growth with clean and renewable sources of energy."

Elsewhere in China, the Shanghai composite index re-opened after a public holiday and rebounding from its worst selloff since 2008. Stocks started trading 4.8% down but closed 2.2% higher.

The Chinese manufacturing PMI by HSBC improved to 49.6 in June from 49.2, beating the 49.4 estimate. The improvement was driven by a rise in new export orders.

Capital Economics analysts said: "Despite the recent improvement in economic momentum, we expect further policy easing in coming months, including an additional cut to benchmark interest rates and further reductions to the required reserve ratio."

The economists added they remain confident policymakers can still achieve their annual growth target of about 7%.

Hong Kong's Hang Seng also rose 0.93% amid increased optimism that Greece will strike a deal with its creditors.

An emergency EU summit failed to result in a new cash-for-reforms agreement, but the submission of new proposals to creditors by Greece raised hopes over a short-term funding deal.

Meanwhile in Australia, the ASX index gained 1.32%.

In economic data, Aussie housing prices continued to rise during the first quarter but at a slower pace.

The Australian Bureau of Statistics showed prices rose 1.6% from 2% same time last year, and increased 6.9% year-on-year from a previous reading of 6.7%.

However, in company news, international travel group Flight Centre plunged 13.59% after issuing its second profit warning in six months.

In other news, Baring Asset Management said there has been an increase in consumption across Asia, with market reforms and structural growth support strong investment opportunities over the long-term.

"Rising consumption, positive political and market reforms, and the strength of the technology sector are three fundamental developments pointing to superior investment opportunities in Asia," Barings said.