Asia’s major stock indexes largely recovered on Thursday, lifted by progress in the US debt ceiling talks and surprisingly positive factory data out of China.
There was relief over the passage through the US House of Representatives of a bill to suspend the federal debt limit and a surprise swing to growth for Chinese factory activity also provided in lift to sentiment.
Japan’s Nikkei share average ended higher, also boosted by bargain buying, as investors scooped up stocks after losses in the previous session.
The Nikkei share average edged up 0.84%, or 260.13 points, to close at 31,148.01, while the broader Topix was ahead 0.88%, or 18.66 points, to 2,149.29.
The Nikkei had snapped a four-day winning streak in the previous session, dropping the most since April 5 on profit-booking.
Among individual stocks, technology investor SoftBank Group Corp jumped 4.57% to become the top gainer on the Nikkei.
Toyota Motor Corp rose 1.81% after the automaker said it would invest $2.1 billion more in its new US battery plant in North Carolina in an effort to tap rising demand for electric vehicles.
Mainland China stocks rose, after a private sector survey showed the country’s factory activity unexpectedly swung to growth in May from decline.
The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 50.9 in May from 49.5 in April, beating expectations of 49.5 in a Reuters poll, and a stark contrast to a deeper contraction activity seen in the official PMI released on Wednesday.
Artificial Intelligence (AI)-themed stocks led the gains with the Shanghai Composite Index edging up 0.01%, or 0.07 points, to 3,204.63, while the Shenzhen Composite Index on China’s second exchange rose 0.45%, or 9.05 points, to 2,012.23.
Tech giants listed in Hong Kong advanced 2%, with food delivery giant Meituan up more than 5%, but Hong Kong’s benchmark Hang Seng fell 0.10%, or 17.36 points, to 18,216.91 as caution over China’s long-term recovery prospects weighed.
Elsewhere across the region, in early trade, Sydney, Singapore, Wellington and Manila all rose, though Seoul and Taipei struggled.
MSCI’s broadest index of Asia-Pacific shares gained 0.82%, rebounding after touching the lowest level since March 22 in the previous session.
US Dollar Dips Versus Yen
In the US, a divided House passed a bill to suspend the $31.4 trillion debt ceiling – and avert a catastrophic default – with majority support from both Democrats and Republicans, stoking optimism that it can move through the Senate before the weekend.
The dollar dipped to a one-week low versus the yen and hung close to Wednesday’s more-than-two-month trough to the euro after Federal Reserve officials, including governor and vice chair nominee Philip Jefferson, pointed to a rate hike “skip” at the June 13-14 policy meeting. Treasury yields edged up from nearly two-week nadirs.
Money markets currently lay about 38% odds for a hike from the Fed on June 14, swinging back from about 70% earlier in the day, after some unexpectedly hot jobs numbers.
More closely watched employment data is due this week, with the ADP survey out later in the day, followed by the monthly non-farm payrolls report on Friday.
Benchmark 10-year US Treasury yields edged up to 3.6733% in Tokyo, after dipping to 3.6140% overnight for the first time since May 18.
Brent crude futures for August delivery rose 35 cents, or 0.48% to $72.95 a barrel, while US West Texas Intermediate crude added 27 cents, or 0.4%, to $68.36 a barrel.
Tokyo – Nikkei 225 > UP 0.84% at 31,148.01 (close)
Hong Kong – Hang Seng Index < DOWN 0.10% at 18,216.91 (close)
Shanghai – Composite > UP 0.01% at 3,204.63 (close)
London – FTSE 100 > UP 0.67% at 7,495.86 (0936 GMT)
New York – Dow < DOWN 0.41% at 32,908.27 (Wednesday close)
- Reuters with additional editing by Sean O’Meara