Asia’s major markets edged upwards on Wednesday as investors weighed up the strength of the global recovery amidst the fast-spreading Delta Covid variant.
Any optimism on trading floors continues to be tested by the stuttering rollout of vaccines and a spike in infections in some countries – as well as China’s drive to tighten its grip on the world’s number two economy with a swathe of new regulations for private enterprises.
Federal Reserve boss Jerome Powell’s hint on Friday that the central bank will take it easy in winding back its ultra-loose monetary policy – and even more cautious in hiking interest rates – has helped fuel a healthy start to the week.
But Wall Street still finished Tuesday on a tepid note after a closely watched survey showed US consumer confidence sharply dropped in August to its lowest level in six months over Delta concerns and surging prices.
Asia started the day on a mixed note but most of its major markets recovered in the afternoon, with traders appearing to brush off the impact of data indicating Chinese factory activity contracted last month.
The Caixin purchasing managers index reading came a day after an official report suggesting manufacturing activity was barely growing and services sector activity shrinking.
Tokyo, Hong Kong, Shanghai, Singapore, Seoul and Wellington were all in positive territory but Sydney, Taipei, Manila, Mumbai, Bangkok and Jakarta fell.
The Nikkei 225 index rose 1.29%, or 361.48 points, to 28,451.02, while the broader Topix index gained 1.02%, or 20.09 points, to 1,980.79.
The Hang Seng Index added 0.58%, or 149.30 points, to 26,028.29. The Shanghai Composite Index rose 0.65%, or 23.16 points, to 3,567.10, though the Shenzhen Composite Index on China’s second exchange shed 0.49%, or 11.97 points, to 2,417.89.
Focus is now on the release on Friday of US jobs data, which could have a huge bearing on when the Fed decides to start winding down its bond-buying financial support programme.
Oil prices rose ahead of the monthly meeting of OPEC and other producers who are expected to continue raising output with the global recovery largely still on track.
Industry body the American Petroleum Institute said stockpiles rose more than 2 million barrels last week, according to reports, and observers expect the market to wobble over the coming months.
“The market is likely to remain volatile – we not only have the OPEC meeting, hurricane season is also upon us,” Howie Lee, at Oversea-Chinese Banking Corp, said.
“Brent is still expected to trend within $70 to $75 for now, but the near-term volatility means it may overshoot on both ends momentarily in the coming week or two.”
Tokyo – Nikkei 225: UP 1.3% at 28,451.02 (close)
Hong Kong – Hang Seng Index: UP 0.6% at 26,028.29 (close)
Shanghai – Composite: UP 0.7% at 3,567.10 (close)
New York – Dow: DOWN 0.1% at 35,360.73 (close)
- AFP and Sean O’Meara
This story was updated with a new headline.