Asian markets gain on renewed optimism after Wall Street’s rally

Asian markets gain on renewed optimism after Wall Street’s rally

Stocks rise in Tokyo, Hong Kong, Seoul, Sydney

TOKYO — Asian shares rose Tuesday, cheered by a rally on Wally Street reflecting some optimism over stronger than expected economic data, despite widening coronavirus outbreaks.

Japan’s benchmark Nikkei 225 JP:NIK gained 1.8% in morning trading. South Korea’s Kospi KR:180721 gained 1.5%, while Australia’s S&P/ASX 200 AU:XJO rose 1.4%. Hong Kong’s Hang Seng HK:HSI edged up 0.9% and the Shanghai Composite CN:SHCOMP was up nearly 0.5%. Benchmark indexes in Taiwan TW:Y9999 , Singapore SG:STI and Indonesia ID:JAKIDX gained.

Analysts say questions remain on how the global economy will hold up as coronavirus outbreaks expand. Japan’s economy has been gradually reopening with social distancing restrictions.

“These will be important questions to answer as equity markets hang in a delicate balance at present,” Jingyi Pan, market strategist at IG, said in a commentary.

A survey of China factory managers released Tuesday was better than expected, suggesting the global economy may be on the upswing after bottoming out at the height of shutdowns in April-May, analysts said.

Increases in production and new orders, especially export orders, points to a rebound in foreign demand, though it remains much weaker than overall new orders, said Martin Rasmussen, an economist at Capital Economics.

The manufacturing purchasing managers index for June was 50.9, higher than forecast, on a scale where 50 marks the cutoff between expansion and contraction. The non-manufacturing was 54.4, compared with an expected 53.6.

On Wall Street, the market rallied after a much healthier-than-expected report on the housing market put investors in a buying mood. Technology, industrial and communications stocks accounted for much of the market’s broad gains. European stocks also closed higher. Treasury yields were mixed and oil prices rose.

The pickup in U.S. stocks after a weekly loss marks the latest choppy move for markets around the world, which have been swinging back and forth in recent weeks as investors balance hope for a relatively quick economic rebound as more businesses reopen against worry as an increase in confirmed new coronavirus cases forces some businesses to close their doors again.

“It’s just another day of normal volatility, its unfortunately what we’re living with now,” said Mark Litzerman, head of global portfolio management at Wells Fargo Investment Institute. “It tends to be this tug of war between better economic data coming through versus a rise in cases.”

The S&P 500 US:SPX gained 1.5% to 3,053.24. The Dow Jones Industrial Average US:DJIA rose 2.3% to 25,595.80 and the Nasdaq composite US:COMP added 1.2%, to 9,874.15.

A rise in infections of the new coronavirus, including in the U.S. South and West, has dented the optimism that earlier sent the S&P 500 streaking nearly all the way back to the record it reached in February.

The worry is that the worsening levels could choke off the budding improvements the economy has shown recently as states and other governments ease up on lockdown orders, even with the Federal Reserve and other central banks pumping unprecedented amounts of aid into the economy.

The yield on the 10-year Treasury held steady at 0.63%.

Benchmark U.S. crude oil US:CLQ20 fell 26 cents to $39.44. It rose $1.21 to $39.70 a barrel on Monday. Brent crude oil for August delivery UK:BRNQ20 slipped 25 cents to $41.46 a barrel.

The dollar US:USDJPY rose to 107.74 Japanese yen from 107.57 yen.

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