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Shares fell in Asia on Thursday as investors reflected on figures showing China’s economy returned to growth in the last quarter.
The Shanghai SHCOMP Composite Index,
led the falls on Thursday, falling 4.2% to 3,262.41. Benchmarks also fell in Tokyo, Hong Kong, and Sydney.
News that China’s economy grew 3.2% year-on-year in April-June, after a 6.8% contraction in the previous quarter, was unable to sustain an overnight rebound.
The expansion occurred when antivirus locks were lifted and factories and stores reopened. But it was still the weakest positive figure since China began reporting quarterly growth in the early 1990s.
Weak retail sales showed that boosting factory production is the easy part, said Stephen Innes of AxiCorp.
“No matter how much stimulus and fiscal sugar you try to attract consumers, they will not leave your department and go on spending until they feel confident that the landscape is virus free,” he said in a report.
Nikkei 225 NIK from Tokyo,
lost 0.7%, while the Hang Seng HSI,
in Hong Kong it fell 1.6%. In South Korea, the Kospi 180721,
shed 0.8%.
Sensex 1 from India,
was the outlier, gaining 0.5%. Shares fell in Southeast Asia and Taiwan.
In Australia, the S & P / ASX 200 XJO,
It fell 0.6%, as authorities reported that the state of Victoria had confirmed a record 317 new coronavirus cases in one day.
Victoria’s government responded by reducing the number of non-urgent surgeries allowed in hospitals to increase the number of beds available for COVID-19 patients, Health Minister Jenny Mikakos said.
The actions advanced worldwide on Wednesday after researchers announced Tuesday that one developed by the National Institutes of Health and Modern MRNA,
it had boosted people’s immune systems in the first tests, as expected.
During the night, the S&P 500 SPX,
It rose 0.9% to 3,226.56, reaching 4.7% of its all-time high in February. The Dow Jones Industrial Average DJIA,
also rose 0.9% to 26,870.10, and the Nasdaq Composite COMP,
It gained 0.6%, at 10,550.49.
With vaccine hopes at the center of the rise, the market ranking was dominated by companies that would benefit the most from a return to normal life. They included cruise operators, airlines, retailers, and hotel chains.
Shares of smaller companies also rose much more than the rest of the market, an indication of rising expectations for the economy. The Russell 2000 Small Cap Index increased 3.5%, a change from the previous months when big tech-oriented companies were leading the market.
The winners of the quarantine and blockade stay-at-home economy, meanwhile, were left behind. Clorox, Netflix and Amazon fell.
The increasing number of infections and deaths from the COVID-19 pandemic remains a constant source of uncertainty.
Concerns also remain high over the fact that the stock market has overstepped its recovery: it took less than four months for the S&P 500 to return to its record after dropping nearly 34%. But it could take years for the economy and corporate profits to get back to where they were before the pandemic occurred.
A series of troubling news, from the more than 13.5 million confirmed cases of COVID-19 to the increasing friction between Washington and Beijing, hangs over the markets, but has been offset by the enormous amounts of stimulus poured into financial systems by central banks to counter pandemic recession.
“In most other realities, this would be ironic or absurd. But liquidity flooded the post-COVID world markets, this is Thursday, ”said Riki Ogawa of Mizuho Bank in a comment.
The 10-year Treasury yield fell to 0.62% from 0.63% Wednesday night. It tends to move with investor expectations for the economy and inflation.
In other operations, the US benchmark crude CLQ20,
shed 45 cents at $ 40.75 a barrel in e-commerce on the New York Mercantile Exchange. It rose 91 cents to hit $ 41.20 a barrel on Wednesday.
The USDJPY dollar,
He bought 106.95 against the Japanese yen, up from 106.96 yen on Wednesday night.
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