NEW YORK, July 7 ― Asian markets looked set to rise today as investors weighed growing expectations of an economic rebound in China and a resurgent US services industry, brushing off worries about a spike in US coronavirus cases.
Australian S&P/ASX 200 futures climbed 0.52 per cent, while Japan's Nikkei 225 futures rose 0.07 per cent, and Hong Kong's Hang Seng index futures were up 0.68 per cent. E-mini futures for the S&P 500 rose 0.08 per cent following a rally in global stocks yesterday.
Bullish sentiment toward the Chinese economy propelled the yuan yesterday to its best day against the dollar since December, while an index of blue-chip Chinese shares soared to its highest in five years.
Jawboning by the Chinese government through a state-sponsored journal on the importance of “fostering a healthy bull market” helped spur the move, said Ray Attrill, head of FX strategy at NAB, in a research note.
“Shades of John F. Kennedy's 'Ask not what your country can do for you' inauguration speech here and as close as you might get to a Chinese government 'put' as anything the Fed has done to date vis-à-vis the US stock (and credit) markets,” he said in his description of the Chinese report.
Stocks also rallied on a sharp rebound in US services industry activity in June, almost returning to pre-pandemic levels, even as new coronavirus cases surged in several states, forcing some restaurants and bars to close again in a setback to the budding recovery.
On Wall Street, the Dow Jones Industrial Average rose 1.78 per cent, the S&P 500 gained 1.59 per cent and the Nasdaq Composite 2.21 per cent.
Emerging market stocks rose 2.65 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan closed 2.46 per cent higher yesterday.
The Reserve Bank of Australia is expected to hold its cash rate at 0.25 per cent and make no changes to policy at today's board meeting, leaving markets to focus on the accompanying statement. There will be particular attention on whether the central bank notes the Australian dollar's rise.
The Australian currency was up 0.04 per cent versus the greenback at US$0.698 (RM2.9859).
Gold edged toward an almost eight-year high hit last week as the spike in coronavirus cases kept safety demand elevated, although the rally in stocks and strong US services sector data limited the metal's advance.
US gold futures settled up 0.2 per cent at US$1,793.50 per ounce.
Brent crude settled up 30 cents at US$43.10 a barrel, while US West Texas Intermediate crude fell 2 cents to settle at US$40.63. ― Reuters
