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Asian Shares Advance On Economic Recovery Hopes

marketopen 011519 02jun20 lt

Asian stocks rose on Tuesday as hopes of an economic recovery after the coronavirus pandemic helped offset jitters over social unrest in the U.S. and rising U.S.-China tensions.

China's Shanghai Composite Index inched up 5.97 points, or 0.2 percent, to 2,921.40 as investors brushed off news that Beijing had ordered its state-run agricultural firms to temporarily halt buying some U.S. farm goods.

Hong Kong's Hang Seng Index jumped 263.42 points, or 1.1 percent, to 23,995.94 even as data showed a continued slump in retail sales in April.

Japanese shares hit a more than three-month high as investors pinned hopes on an economic recovery and corporate earnings growth.

The Nikkei 225 Index rallied 263.22 points, or 1.2 percent, to 22,325.61 after earlier rising to its highest level since February 26 on optimism about the phased reopening of the Japanese economy.

On Monday, the Tokyo Metropolitan Government entered the second phase of its three-part plan to gradually ease social distancing measures and allow businesses to reopen.

The broader Topix index closed 1.2 percent higher at 1,587.68, with industrial and technology companies leading the surge.

Market heavyweight SoftBank Group jumped 3.3 percent, while Fast Retailing slipped 0.2 percent. Exporters Honda Motors, Sony and Canon rose between 1.1 percent and 2.6 percent.

Australian markets closed higher despite weakness in the mining sector. The benchmark S&P/ASX 200 Index rose 15.90 points, or 0.3 percent, to 5,835.10 as the Reserve Bank of Australia left its interest rate and the target yield on three-year government bonds unchanged, as widely expected.

Policymakers said this accommodative approach will be maintained as long as it is required. The broader All Ordinaries index ended up 21.70 points, or 0.4 percent, at 5,960.10.

Energy stocks ended mostly lower despite oil prices crawling higher ahead of OPEC plus meeting.

Australia and New Zealand Banking Group edged down slightly after it announced the sale of its asset finance unit in New Zealand, UDC Finance, to Japan's Shinsei Bank for NZ$762 million.

Miners BHP, Fortescue Metals Group and Rio Tinto fell between 0.3 percent and 0.8 percent. Gold miners Evolution and Newcrest dropped 1-2 percent after gold prices dipped overnight.

Seoul stocks rose sharply after revisions to GDP data showed a slight improvement. South Korea's GDP contracted a seasonally adjusted 1.3 percent sequentially in the first three months of 2020, the Bank of Korea said in a preliminary reading. That's an upward revision from last month's advance estimate that suggested a decline of 1.4 percent.

Another report showed that consumer prices in South Korea were down 0.3 percent year-on-year in May - missing expectations for -0.2 percent and slowing from 0.1 percent in April.

The Kospi average gained 22.11 points, or 1.1 percent, to finish at 2,087.19.

New Zealand shares rallied, with the benchmark S&P/NZX 50 Index climbing 151.76 points, or 1.4 percent, to 11,034.17. Synlait Milk shares surged 9.2 percent and Fletcher Building soared 6.8 percent.

The total number of building consents issued in New Zealand dropped a seasonally adjusted 6.5 percent month-on-month in April, Statistics New Zealand said today, following the downwardly revised 22.0 percent fall in April

Another report showed that New Zealand's terms of trade fell a seasonally adjusted 0.7 percent sequentially in the first three months of 2020 -missing expectations for an increase of 1.3 percent following the 2.6 percent gain in the three months prior.

Indonesia's Jakarta Composite Index spiked 2 percent. The manufacturing sector in the country continued to contract in May, albeit at a lightly slower pace, the latest survey from IHS Markit showed with a manufacturing PMI score of 28.6, up from the record low of 27.5 in April.

U.S. stocks rose overnight as optimism around economic reopenings offset nationwide protests against police brutality as well as rising U.S.-China tensions. In economic news, a report showed U.S. manufacturing activity contracted at a slower rate in the month of May.

The Dow Jones Industrial Average gained 0.4 percent, while the tech-heavy Nasdaq Composite added 0.7 percent and the S&P 500 rose 0.4 percent to reach their best closing levels in three months.

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