Categories
Local

Asian stocks reach four-month high, markets remain stubbornly optimistic


SYDNEY (Reuters) – Asian stocks hit a four-month high on Wednesday, with investors stubbornly optimistic about the prospects for the global economy to reopen, even though coronavirus cases appeared to be accelerating to new highs.

The largest MSCI index of Asia-Pacific stocks outside of Japan added 0.5% to reach its highest level since the pandemic pandemic hit the markets in early March.

South Korea led with a 1.6% increase, while Japanese Nikkei remained stable against a firm yen. The E-Mini futures for the S&P 500 reversed expected losses to gain 0.2%, while the EUROSTOXX 50 futures contract lagged 0.3%.

On Wall Street, the Dow Jones ended Tuesday up 0.5%, while the S&P 500 gained 0.4% and the Nasdaq 0.7%.

Information about the coronavirus was bleak, with several US states having seen record infections and the death toll in Latin America exceeding 100,000 on Tuesday, according to a Reuters count.

The European Union is even ready to ban American travelers due to soaring 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 bar to close the economies again, so that the impact on business activity will not be too great.

Stubborn optimism about the world economy was supported by optimistic surveys of the manufacturing industry in Europe, with France standing out because the lock that was loosened there led to a modest return to growth.

This follows solid June readings across much of Asia, although Japan has disappointed.

Also read:  U.S. Democrats scramble to hammer out climate legislation ahead of Glasgow talks

“A surprise in recent data has been the resilience of activity data in emerging Asian countries, even though the global economy has slowed sharply and global demand remains below pre-pandemic levels,” said JPMorgan analysts said in a note.

“This result appears to be due in large part to the fact that the technology sector outperforms the non-technology sector, most likely reflecting in part a temporary increase in homework on demand.”

The best European data combined with the positive mood for risk to keep the US dollar under pressure. Against a basket of major currencies, it fell to 96.578 against 97.719 at the start of the week.

The euro rose slightly to $ 1.1320, after reaching $ 1.1167 on Monday, while the dollar fell to 106.50 yen after hitting a low of 106.06 at one point.

“The dollar and the feeling of risk should remain globally negatively correlated, except that the United States shows a clear and lasting leadership in the global economic recovery, which is difficult to reconcile with the dark American news on COVID,” said Ray Attrill, Head of FX Strategy at NAB.

The New Zealand dollar eased after the country’s central bank said it might have to do more to stimulate the economy, including cutting rates further, increasing bond purchases or even buying foreign assets.

In the commodities markets, the decline in the dollar and the endless low-cost liquidity of central banks helped bring gold to its highest level since October 2012. The metal was last at $ 1,770 per ounce.

Oil futures have eased from four-month highs after stocks of US crude rose 1.7 million barrels of surprisingly large oil last week, according to industry data. This compares to analysts’ expectations for a construction of 300,000 barrels. US government data will be released on Wednesday.

Also read:  U.S. retail sales post record increase; big hole remains

Brent crude futures fell 8 cents to $ 42.55 a barrel, while US crude fell 20 cents to $ 40.17.

Source: Reuters

Leave a Reply

Your email address will not be published. Required fields are marked *