Major markets in Asia attempted to bounce back in Monday afternoon trade after sharp losses last week, even though Chinese manufacturing data released over the weekend and on Monday came in much worse than expected.

Mainland Chinese stocks surged by the afternoon as they attempted to recover from Friday’s steep fall. The Shanghai composite was about 2.9% higher while the Shenzhen component added 3.39%. The Shenzhen composite gained 3.415%. Hong Kong’s Hang Seng index also advanced 0.92%.

The moves upward on the mainland came despite a private survey released Monday that showed factory activity in China slumping to a record low in February. The Markit/Caixin manufacturing Purchasing Managers’ Index (PMI) dropped to 40.3, much lower than expectations of a reading of 45.7 in a Reuters poll. The figure had come in at 51.1 in January. The 50-point level in PMI readings separates growth from contraction.

The survey release came on the back of data released by the National Bureau of Statistics on Saturday, which showed the official PMI falling to 35.7 in February ⁠— the lowest level on record, according to Reuters — as compared to a reading of 50.0 in January. Analysts in a Reuters poll had expected the official February PMI to come in at 46.0.

“China’s February manufacturing PMI at 35.7 is comparable to the sort of outcomes seen during the financial crisis,” Richard Yetsenga, chief economist at Australia and New Zealand Banking Group, wrote in a note dated Mar. 2. “While businesses are restarting operations in China, the vast majority are operating well below capacity, and many restrictions on the movement of people remain.

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Elsewhere, the Nikkei 225 in Japan recovered from an earlier slip to rise 1.24%. Shares of Sharp were up more than 2.5% following reports from Japanese media late last week that the firm is set to start making face masks amid a shortage caused by the coronavirus outbreak. South Korea’s Kospi gained 1.04%.

Stocks in Australia, however, continued to decline on Monday, with the S&P/ASX 200 down about 0.9% after it tumbled through last week.

Meanwhile, the FTSE Bursa Malaysia KLCI Index slipped 0.52%. That followed the shock appointment of a new prime minister after the country’s former premier Mahathir Mohamad unexpectedly resigned last week

Overall, the MSCI Asia ex-Japan index was 1.09% higher.

OCBC’s Vasu Menon told CNBC on Monday that the market rebound was due to “a case of bad news being good news.”

“Markets are saying that you know the bad news, the fallout in the markets might lead policymakers to launch stimulus and stimulus is seen as good news for the markets at least for the short-term,” Menon, who is executive director of investment strategy, wealth management Singapore at OCBC Bank, told CNBC’s “Street Signs” on Monday.

Menon said markets are now pricing in a “aggressive move” by the U.S. Federal Reserve, following the central bank chairman’s comments on Friday about taking “appropriate” action to support the economy. Meanwhile, the “bad” Chinese PMI numbers have also raised expectations that the People’s Bank of China could take action, he said.

“Will the kind of policy stimulus we’re talking about, in terms of monetary policy, take care of a virus problem?,” he said. “I’ll be cautious, I wouldn’t be too aggressive at this juncture.”

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Markets have seen a global sell-off in recent days as investor concerns rose over the rapid spread of the coronavirus outside of China, where it was first reported. The sharp moves downward left seven major Asia-Pacific markets in correction territory by Friday’s market close, with their counterparts stateside and in Europe also seeing steep losses.

Amid the market turmoil, bond yields have continued touching new record lows. On Sunday night stateside, the benchmark U.S. 10-year Treasury yield broke below 1.04% for the first time ever. It was last at 1.0753%.

At least 85,000 cases of the coronavirus have been confirmed around the world so far, along with more than 2,900 virus-related deaths. Australia, Thailand and the U.S. reported over the weekend their first coronavirus-related deaths. On Sunday, World Health Organization Director-General Tedros Adhanom Ghebreyesus said global markets “should calm down and try to see the reality.”

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.946 after declining from levels around 99.6 last week.

The Japanese yen, often viewed as a safe-haven currency in times of economic uncertainty, traded at 108.18 per dollar after strengthening from levels above 110 last week. The Australian dollar changed hands at $0.6521 after dropping from levels above $0.6555 last week.

Oil prices surged in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 3.38% to $51.35 per barrel. The U.S. crude futures contract gained 2.95% to $46.08 per barrel.