TOKYO / NEW YORK (Reuters) – Asian stocks rose on Tuesday after data showed China’s manufacturing sector grew more than expected in June, a sign of hope for a global economy still struggling to recover from the impact of the coronavirus crisis.
FILE PHOTO: A man in a protective mask walks past the Singapore Stock Exchange (SGX) in the Central Business District area of Singapore on April 7, 2020. REUTERS / Edgar Su
MSCI’s broader Asia-Pacific index of stocks outside Japan rose 0.9%, while US equity futures, the SP 500 e-minis, rose 0.23%.
Sentiment in the region, which received a boost from overnight earnings on Wall Street thanks to solid housing data, received fresh momentum from a survey in China showing increased activity in its vast sector. manufacturing.
The stock market in Australia, which has crucial economic ties to China, was up 1.59%, while stocks in China gained 0.72%.
Hong Kong shares rose 1.18%, undeterred by the Chinese parliament’s passage of a security law that will increase Beijing’s control over the former British colony.
The Nikkei rose 2%, avoiding a larger-than-expected decline in Japanese industrial production.
Overall, however, Asian stocks are still on track for a 7% decline during the first half of this year, underscoring the severity of the losses caused by the pandemic and the challenges investors face as stocks Global infections continue to rise in a blow to hopes for a speedy recovery.
“Overnight movements in the markets were not great, but one has the clear impression that the markets do it both ways: stocks recover from rebound data and bonds recover on sad COVID-19 news” said Rahul Khare, an analyst at ANZ Research.
In fact, for the second quarter, ex-Japan Asian stocks were on track for a 17.8% gain, which would be the largest quarterly increase since the third quarter of 2009. Stocks appear to have received an additional boost on Tuesday, as some investors adjusted positions on The last trading day of the quarter.
On Monday, the Dow Jones Industrial Average rose 2.32%, the S&P 500 gained 1.47%, and the Nasdaq Composite added 1.2%.
China’s official purchasing managers index (PMI) released on Tuesday showed that manufacturing activity in the world’s second-largest economy grew for the fourth consecutive month in June. China’s service sector PMI also expanded at a faster rate compared to the previous month.
A recent resurgence of coronavirus infections had led some investors to question the strength of a rebound in global economic activity.
The shift in sentiment between hopes and fears has kept markets on edge.
Benchmark 10-year Treasury yield changed little by 0.6348% in Asia, as traders prepared for US non-farm payroll data on Thursday, which is forecast to show an improvement in the market. labor.
US Federal Reserve Chairman Jerome Powell said Monday that the outlook for the world’s largest economy is “extraordinarily uncertain” and noted that further monetary stimulus may be necessary, which could limit gains in yields.
Confirmed cases of COVID-19 worldwide increased more than 10 million and deaths exceeded 500,000 over the weekend.
Most of the new cases were reported in the United States and Latin America, fueling fears that the outbreak could halt economic recoveries just as blockages begin to ease.
In the currency markets, the dollar maintained gains against the yen and the Swiss franc as the recent surge in coronavirus infections supported demand for refuge for the dollar. [FRX/]
In the terrestrial market, the yuan rose slightly to 7.0685 against the dollar.
US crude fell 0.48% to $ 39.51 a barrel, while Brent crude fell 0.31% to $ 41.58 a barrel, weighed down by concerns about oversupply after Libya cited progress in resuming oil exports. . [O/R]
Additional reports from Stanley White in Tokyo; Editing by Sam Holmes and Shri Navaratnam
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