Asia stocks rise as upbeat factory data lifts confidence2 min read
Asian shares rose on Tuesday after strong U.S. 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%, while shares in China nudged up 0.1%. Australian stocks gained 2% for the biggest intraday gain since July 21. Tokyo shares also jumped by more than 1%.
Oil futures gave up their overnight gains and fell in Asia due to nagging worries about an increase in the supply of crude. U.S. stock futures were 0.02% higher in Asia.
An industry gauge released overnight indicated U.S. manufacturing activity expanded in July at the fastest pace in more than a year, which helped Wall Street shares rise on Monday.
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.
On Monday the Dow Jones Industrial Average rose 0.89%, the S&P 500 gained 0.72%, and the Nasdaq Composite advanced 1.47% to set a record closing high as investors cheered the manufacturing data.
That data also caused the U.S. Treasury curve to steepen, an indication of improved investor sentiment.
U.S. President Donald Trump has threatened to ban TikTok unless its U.S. 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.
U.S. House Speaker Nancy Pelosi will meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows on Tuesday to continue talks, raising hopes for a breakthrough sometime soon.
Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more U.S. government spending to support the economy, saying “demand trouble is brewing” as existing relief policies expire.
Spot gold was down 0.09% on Tuesday but still near a record high of $1,984.66 set on Monday amid support from virus fears.
U.S. crude dipped 0.61% to $40.76 a barrel, while Brent crude fell 0.59% to $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.