The unrelenting momentum of post-pandemic growth in the US continued to spread optimism across trading floors despite worries over Covid’s resurgence and new lockdowns being imposed
Equities advanced in most Asian markets on Wednesday, building on strong gains in Europe and Wall Street as investors were buoyed by optimism over a strong economic recovery – despite fears over rising virus cases around the world.
Asia’s traders were given a healthy lead by their US counterparts after the S&P 500 and Nasdaq again finished at record highs in New York, as data showed US consumer confidence surged in June to its highest pandemic-era level.
The Conference Board’s monthly report showed Americans increasingly upbeat about the economy and their job prospects, putting aside worries over rising prices.
“Low virus transmission, vaccinations, and expanded reopenings made consumers much more confident,” Oren Klachkin of Oxford Economics said. “Consumers are coming out of their shell.”
The positive mood bodes well for other key data this week including on factory and services activity, with the crucial June jobs report – which will give an up-to-date snapshot of the world’s biggest economy – due on Friday.
The advance in New York, which was mirrored in Europe, flowed through to most of Asia. Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Mumbai, Bangkok and Jakarta were all up, though Hong Kong, Tokyo and Manila were down.
The Hang Seng Index fell 0.57%, or 166.15 points, to 28,827.95. The benchmark Shanghai Composite Index added 0.50%, or 18.02 points, to 3,591.20, while the Shenzhen Composite Index on China’s second exchange climbed 1.02%, or 24.98 points, to 2,466.24.
In Tokyo, the benchmark Nikkei 225 index edged down 0.07% or 21.08 points to end at 28,791.53, while the broader Topix index slid 0.30% or 5.91 points to 1,943.57.
There was little movement in response to data out of China showing growth in the country’s manufacturing sector had inched down marginally but officials warned over supply shortages of chips and commodities.
Still, while the broad outlook is upbeat, traders are keeping an eye on the spread of the more transmissible Delta variant, which began in India and is sending infection rates soaring, forcing some governments – from Australia and Asia to Europe and South America – to impose new lockdowns.
Nevertheless, analysts said a resurgent virus is unlikely to temper the global rally, given the broad success of vaccine rollouts in much of the world.
Oil prices were mixed though demand expectations continue to improve as vaccines are rolled out and, despite the latest virus spikes, economies gear up for a strong recovery.
Both main contracts are sitting around multi-year highs, helped by an American Petroleum Institute report that US stockpiles had fallen last week, with eyes now on Thursday’s meeting of OPEC and other key producers.
Tokyo – Nikkei 225: DOWN 0.1% at 28,791.53 (close)
Hong Kong – Hang Seng Index: DOWN 0.6% at 28,827.95 (close)
Shanghai – Composite: UP 0.5% at 3,591.20 (close)
New York – Dow: UP less than 0.1% at 34,292.29 (close)
- Reporting by AFP