TOKYO, Aug 4 — Asian shares rose today after strong US manufacturing data and gains in tech stocks helped investors look past broader worries about the coronavirus and global economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 per cent, while shares in China nudged up 0.1 per cent. Australian stocks gained two per cent for the biggest intraday gain since July 21. Tokyo shares also jumped by more than one per cent.
Oil futures gave up their overnight gains and fell in Asia due to nagging worries about an increase in the supply of crude. US stock futures were 0.02 per cent higher in Asia.
An industry gauge released overnight indicated US manufacturing activity expanded in July at the fastest pace in more than a year, which helped Wall Street shares rise yesterday.
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 US trading session and Asia will absorb the leads accordingly,” Chris Weston, head of research at Pepperstone, said in a market note.
Yesterday, the Dow Jones Industrial Average rose 0.89 per cent, the S&P 500 gained 0.72 per cent, and the Nasdaq Composite advanced 1.47 per cent to set a record closing high as investors cheered the manufacturing data.
That data also caused the US Treasury curve to steepen, an indication of improved investor sentiment.
US stocks received an additional lift from Microsoft, which jumped 5.6 per cent after it formally declared interest in buying the US operations of TikTok, a popular video-sharing app owned by Chinese tech company ByteDance.
US President Donald Trump has threatened to ban TikTok unless its US 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.
US House Speaker Nancy Pelosi will meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows today 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 yesterday called forcefully for more US government spending to support the economy, saying “demand trouble is brewing” as existing relief policies expire.
Spot gold was down 0.09 per cent today but still near a record high of US$1,984.66 (RM8,370) set yesterday amid support from virus fears.
US crude dipped 0.61 per cent to US$40.76 a barrel, while Brent crude fell 0.59 per cent to US$43.89 per barrel due 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. — Reuters
