Asia shares supported by upbeat U.S. manufacturing, but virus woes cap gains
Reuters
Published Aug 03, 2020 19:47
Updated Aug 04, 2020 03:30
By Stanley White and Julie Zhu
TOKYO/HONG KONG (Reuters) - Asian shares advanced on Tuesday thanks to strong U.S. manufacturing data and upbeat tech stocks, though broader worries about the coronavirus and global economy saw some markets trim early gains.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 0.41%, but shares in China (CSI300) edged 0.04% lower on simmering Sino-U.S. tensions. Australian stocks (AXJO) gained 1.88% for the biggest intraday gain since July 21. Tokyo shares (N225) also jumped by more than 1%.
Euro Stoxx 50 futures (STXEc1) were up 0.49%, German DAX futures (FDXc1) rose 0.53%, while FTSE futures (FFIc1) were up 0.13%.
Oil futures gave up their overnight gains and fell due to nagging worries about an increase in the supply of crude. U.S. stock futures (ESc1) were 0.24% higher.
An industry gauge released overnight indicated U.S. manufacturing activity expanded in July at the fastest pace in more than a year, which helped Wall Street shares rise on Monday.
However, some investors remain cautious due to worries about a resurgence of the coronavirus and a diplomatic tussle over Chinese tech companies' operations in the United States.
"It has been an upbeat U.S. trading session and Asia will absorb the leads accordingly," Chris Weston, head of research at Pepperstone, said in a market note.
On Monday the Dow Jones Industrial Average (DJI) rose 0.89%, the S&P 500 (SPX) gained 0.72%, and the Nasdaq Composite (IXIC) advanced 1.47% to set a record closing high as investors cheered the manufacturing data.
That data also caused the U.S. Treasury curve to steepen, an indication of improved investor sentiment.
U.S. stocks received an additional lift from Microsoft (O:MSFT), which jumped 5.6% after it formally declared interest in buying the U.S. operations of TikTok, a popular video-sharing app owned by Chinese tech company ByteDance.
U.S. President Donald Trump has threatened to ban TikTok unless its U.S. operations are sold off from ByteDance.
Washington is also preparing to take action against other Chinese software companies that could share user data with Beijing, setting the stage for further conflict.
The dollar held steady against its counterparts as traders awaited progress in negotiations for additional economic stimulus.
U.S. House Speaker Nancy Pelosi will meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows on Tuesday to continue talks, raising hopes for a breakthrough sometime soon.
The "only good thing we can say on the political impasse in Washington is that negotiations remain ongoing," analysts at National Australia Bank said in a market note.
Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more U.S. government spending to support the economy, saying "demand trouble is brewing" as existing relief policies expire.
Get The App
Spot gold
U.S. crude (CLc1) dipped 0.17% to $40.94 a barrel, while Brent crude (LCOc1) fell 0.23% to $44.05 per barrel due to worries about extra supply coming to market.
Russia has started to increase oil and gas output, a source told Reuters. Other oil producers are also expected to increase output this month after OPEC and its allies agreed to ease production curbs.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.