RPT-China hopes draw billions in foreign funds back to Asia

* Asia markets likely to extend rally on foreign inflows

* Foreign net inflows to Asia at 48-week high

* China, Taiwan, S. Korea biggest winners (Repeating item first carried on Thursday with no change to text)

By Faith Hung and Kevin Plumberg

TAIPEI/HONG KONG, April 30 (Reuters) - After a six-month drought, foreign investors have been sending billions of dollars back to Asia, a trend some expect to continue on hopes China will lead the region out of the global economic recession.

Foreigners have poured a net $6 billion into six major Asian markets since early March, according to BNP Paribas, helping to boost China, Taiwan and South Korean stocks by up to 35 percent this year and making them the world's best performers.

Regional government efforts to drive their economies out of recession by aggressively cutting interest rates and spending billions of dollars on stimulus packages, especially the $600 billion one implemented by China, are fuelling international investor appetite for risk after months of caution.

"I think it's time to be in risky assets. The rally we've seen since March is the start of a new bull market," said Anthony Bolton, president for investments of Fidelity International, an affiliate of the world's top mutual fund firm Fidelity Investments, on a trip this week to Taiwan.

"I started to put in money in September, November, and then January and March. We are buying China-focused funds," said Bolton, whose contrarian bets made him a top U.K. fund manager for more than two decades.

China's official Purchasing Managers' Index (PMI) for March, rose to 52.4 from 49.0 in February, marking its first time in expansionary territory since September, a rebound that Beijing said the economy may have bottomed. [ID:nPEK25397]

The index is a key survey of the manufacturing sector, showing managers felt cautiously optimistic about the next few months.

To view two graphs on foreign fund inflows and stock market gains in Asia since March, please click on: here here

CHINA LEADS

The massive inflows to China plays and other emerging markets contrast with outflows from developed markets, a sign foreign investors bet China will lead Asia out of the global recession.

Emerging market equity funds have received inflows of $7.3 billion so far this year, compared with outflows of $56.1 billion for developed market equity funds, fund flow tracker EPFR Global said in a recent report.