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Asian Shares Mixed As Virus Worries Weigh

us pre market 053119 07jul20 lt

Asian stocks turned in a mixed performance on Tuesday as investors weighed a spike in coronavirus cases in some U.S. states and other parts of the world against further signs of economic recovery.

Chinese shares extended gains from the previous session on optimism about a quick economic recovery. The benchmark Shanghai Composite Index rose 12.46 points, or 0.4 percent, to 3,345.34, its highest close since February 6, 2018. Hong Kong's Hang Seng Index ended down 1.4 percent at 25,975.66.

Japanese shares ended lower to snap a three-day winning streak as investors assessed the impact of deadly floods and landslides triggered by record heavy rain in western Japan. The Nikkei 225 Index fell 99.75 points, or 0.4 percent, to 22,614.69, while the broader Topix closed 0.3 percent lower at 1,571.71.

Automaker Toyota Motor fell 1.3 percent and Mazda Motor slumped 3.6 percent after the disaster forced them to temporarily close their western Japan plants. Meanwhile, SoftBank Group spiked 4.6 percent.

In economic news, the average of household spending in Japan was down 16.2 percent year on year in May, the Ministry of Internal Affairs and Communications said. That missed expectations for a drop of 12.2 percent following the 11.1 percent decline in April.

On a monthly basis, household spending fell 0.1 percent - missing expectations for a gain of 1.8 percent following the 6.2 percent slide in the previous month.

Australian markets gave up early gains to end on a flat note after the country's central bank maintained its key interest rate and said it is prepared to scale-up its bond purchases again and will do whatever is necessary to ensure bond markets remain functional and to achieve the yield target for 3-year Australian government securities.

On the data front, the latest survey from the Australian Industry Group showed that the services sector in Australia continued to contract in June, and at a slightly faster rate.

The corresponding index edged down to 31.5 from 31.6 in May, as reduced customer demand continued to drag down most businesses across all services sectors in the month.

The benchmark S&P/ASX 200 Index finished marginally lower at 6,012.90, while the broader All Ordinaries Index ended little changed at 6,126.70.

Banks ANZ, NAB and Westpac fell between 1.6 percent and 1.9 percent. Strong commodity prices helped lift miners, with BHP and Rio Tinto rising 1.3 percent and 0.9 percent, respectively. Smaller rival Fortescue Metals Group jumped 6.3 percent and lithium miner Orocobre surged 4.8 percent.

Gold explorer St Barbara soared 10.3 percent after reporting record quarterly production. Evolution Mining gained 0.8 percent and Newcrest added 2.6 percent after gold prices settled at a nearly 1-week high overnight.

Afterpay shares entered a trading halt after the buy now, pay later company said it would raise $800 million in a share sale.

Seoul stocks fell sharply, with growing concerns over the resurgence of the coronavirus around the globe and caution ahead of the quarterly earnings season denting sentiment.

South Korea reported 44 new coronavirus cases today, bringing the national tally to 13,181. The benchmark Kospi slumped 23.76 points, or 1.1 percent, to 2,164.17.

Market bellwether Samsung Electronics tumbled 2.9 percent despite providing upbeat second quarter earnings guidance. No. 2 chipmaker S K Hynix declined 1.4 percent.

South Korea posted a current account surplus of $2.29 billion in May, the Bank of Korea said today - following the $3.12 billion deficit in April. The goods account surplus narrowed to $2.50 billion, compared to $5.50 billion in May 2019.

New Zealand shares rose as Chinese markets continued their run-up on hopes of a faster economic revival. The benchmark NZX 50 Index hit its highest level in more than four months before paring gains to end the session up 87.52 points, or 0.8 percent, at 11,743.73.

U.S. stocks rallied overnight on the prospect of an improving China and expectations of more stimulus from the world's central banks.

Data showing a substantial turnaround in U.S. service sector activity in June also added to optimism about an economic recovery.

The tech-heavy Nasdaq Composite climbed 2.2 percent to reach another record high despite an increase in coronavirus cases in dozens of states. The Dow Jones Industrial Average rallied 1.8 percent and the S&P 500 added 1.6 percent.

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