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Asian Shares Advance On Economic Optimism

stockmarkets jan23 03jul20 lt

Asian stocks rose on Friday as upbeat economic data from the U.S. and China helped spur fresh optimism about the economic recovery from the Covid-19 pandemic.

Chinese stocks extended gains for a fourth straight session after a survey showed China's service sector expanded strongly in June on improving market conditions following the easing of coronavirus related measures.

The Caixin services Purchasing Managers' Index rose to 58.4 in June from 55.0 in May. The rate of expansion was the fastest since April 2010.

Total new orders advanced at the quickest pace since August 2010 and new export work expanded for the first time since January. The composite output index rose to 55.7 in June from 54.5 in May.

The benchmark Shanghai Composite index climbed 62.24 points, or 2.01 percent, to 3,152.81, while Hong Kong's Hang Seng index rose 0.99 percent to 25,373.12.

Japanese shares closed higher as robust U.S. payrolls data helped offset worries about a spike in Covid-19 cases in the Japanese capital. Tokyo confirmed 124 new virus cases today, the largest daily increase in two months and up from 107 the day before.

The Nikkei average rose 160.52 points, or 0.72 percent, to 22,306.48 after chief cabinet secretary said there was no need to reintroduce a state of emergency. The broader Topix index closed 0.62 percent higher at 1,552.33.

Gaming company Nintendo surged 3.6 percent and medical data platform M3 jumped 4.5 percent as investors assessed the possibility of renewed restrictions.

Travel-related stocks lost ground, with ANA Holdings, Kyushu Railway and Oriental Land all ending down over 1 percent.

Australian markets ended off their day's highs despite positive retail sales and service sector data.

Australian retail sales grew 16.9 percent month-on-month in May, after a 17.7 percent drop in April, a government report showed. Retail sales for May was revised up from 16.3 percent.

The Commonwealth Bank of Australia services Purchasing Managers' Index surged to 53.1 in June from 26.9 in May. The flash reading was 53.2.

The benchmark S&P/ASX 200 index inched up 25.20 points, or 0.42 percent, to 6,057.90, extending gains for a fourth straight session on hopes that a recovery from the coronavirus-led economic downturn was underway.

The broader All Ordinaries index gained 21.40 points, or 0.35 percent, to finish at 6,163.70.

Healthcare stocks extended gains from the previous session, with CSL climbing 2.7 percent and Resmed adding 1.6 percent. Hearing implant provider Cochlear surged 5.9 percent after it gained approval to introduce four products to the U.S. and European markets.

Shipbuilder Austal rallied 3.7 percent amid positive brokerage calls. Rio Tinto declined 1.5 percent. The miner cut the estimated reserves it would mine at Oyu Tolgoi following a redesign to its mine plan.

Woodside Petroleum, Santos and Origin Energy fell between 0.6 percent and 1.2 percent as oil prices dipped in Asian deals after rising overnight on upbeat U.S. jobs data and data showing a drawdown in crude inventories.

Banks ended mostly lower, with ANZ, NAB and Westpac losing between 0.4 percent and 0.9 percent.

Seoul stocks rose as investors cheered encouraging economic indicators from major economies, including the United States. The benchmark Kospi edged up 17.04 points, or 0.80 percent, to 2,152.41 despite rising virus infections in the country. South Korea confirmed 63 cases today, the highest daily hike since 67 cases on June 20.

New Zealand shares ended notably higher, with the benchmark NZX 50 index ending up 56.18 points, or 0.49 percent, at 11,558.70. Auckland International Airport shares gained 1.9 percent.

U.S. stocks eked out modest gains overnight after data showed the economy added more jobs than expected in June to set a second consecutive record. Massive rehiring sent the jobless rate down to 11.1 percent from 13.3 percent in May.

Economists said they are cautiously optimistic about the numbers and the employment numbers are still well below pre-pandemic levels.

The tech-heavy Nasdaq Composite index gained half a percent to reach a fresh record closing high. The Dow Jones Industrial Average rose 0.4 percent and the S&P 500 added half a percent.

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