By Wayne Cole
SYDNEY (Reuters) – Asian stocks rose to a four-month high on Wednesday as investors remained stubbornly optimistic about prospects for a reopening of the world economy, even as coronavirus cases seemed to accelerate to new peaks.
MSCI’s broader index of Asia-Pacific stocks outside of Japan added 0.39% to hit its highest level since early March, although billing was slight.
reaffirmed 0.1% and Chinese blue chips 0.3%. Caution was still evident elsewhere with E-Mini futures for the 0.1% S&P 500 and EUROSTOXX 50 futures declining 0.7%.
On Wall Street, the Dow was 0.5% higher Tuesday, while the S&P 500 gained 0.43% and the Nasdaq 0.74%.
According to a Reuters count, the news about the coronavirus was not encouraging, as several US states. USA They saw record infections and the death toll in Latin America exceeding 100,000 on Tuesday.
The European Union is even prepared to ban American travelers due to the increase in cases in the country, placing it in the same category as Brazil and Russia, the New York Times reported.
However, the market assumes that there is a very high barrier to closing the economies again, so the impact on business activity will not be too great, at least for the moment.
Stubborn optimism about the global economy was backed by optimistic manufacturing polls from Europe, with France sticking out as the blockade that was loosened there led to a modest return to growth.
That followed solid June readings from much of Asia, although Japan disappointed.
“A surprise in recent data has been the resilience of activity data in emerging Asia, even as the world economy slowed sharply and global demand remains below pre-pandemic levels,” analysts at JPMorgan (NYSE 🙂 in a note.
“This result appears to be largely due to the technology sector outperforming the non-technology sector, which probably reflects in part a temporary boost in demand for work from home.”
The best European data combined with the positive risk mood to keep the US dollar under pressure. Against a basket of major currencies, it dipped to 96,578 from a high of 97,719 earlier in the week.
The euro rose to $ 1.1321, having been as low as $ 1.1167 on Monday, while the dollar fell to 106.47 yen after hitting a six-week low of 106.06 in one stage.
“The dollar and risk sentiment are likely to continue to have a general negative correlation, unless the United States shows clear and lasting leadership in the global economic recovery, something difficult to match with the grim US news about COVID,” he said. Ray Attrill, head of currency strategy at COGER.
In the commodity markets, the falling dollar and endless cheap liquidity from central banks helped lift gold to its highest level since October 2012. The metal was last at $ 1,770 an ounce.
Oil futures declined from four-month highs after inventories rose surprisingly large 1.7 million barrels last week, according to industry data. That compares with analyst expectations for a 300,000 barrel construction. Data from the United States government will be released on Wednesday. [O/R]
futures fell 18 cents to $ 42.45 a barrel, while US crude fell 23 cents to $ 40.14.
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