GLOBAL MARKETS-Asian shares hit 4-month high as U.S., China recoveries gather pace

GLOBAL MARKETS-Asian shares hit 4-month high as U.S., China recoveries gather pace

Reuters  | Jul 03, 2020 11:10

GLOBAL MARKETS-Asian shares hit 4-month high as U.S., China recoveries gather pace

* Shanghai shares hit 14-month high on service sector
recovery
* U.S. payrolls jump 4.8 mln but hurdles lie ahead
* Rising U.S. COVID-19 cases threaten U.S. recovery
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano and Imani Moise
TOKYO/NEW YORK, July 3 (Reuters) - Asian shares rallied to a
four-month high on Friday on robust U.S. payrolls data and a
brisk pickup in Chinese service sector activity but a surge in
coronavirus cases in the United States kept a lid on further
risk-taking.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.5%, reaching their highest level since
late February, while Japan's Nikkei .N225 rose 0.4%.
Mainland Chinese shares, which were among the best
performers over the past month, extended gains, with the
Shanghai composite index .SSEC hitting a high last seen in
April 2019.
China's services sector expanded at the fastest pace in over
a decade in June, the Caixin/Markit services Purchasing
Managers' Index (PMI) showed, as the easing of
coronavirus-related lockdown measures revised consumer demand.
"Recovery in China's domestic demand is accelerating, even
though the external demand is still weak. Thus investors are
shifting to domestic-demand oriented sectors," said Wang
Shenshen, senior strategist at Mizuho Securities in Tokyo.
S&P 500 futures were down 0.1% ESv1 but volumes were lower
than usual due to a U.S. markets holiday on Friday for
Independence Day.
The country's nonfarm payrolls surged by 4.8 million jobs in
June, above the average forecast of 3 million jobs in June,
thanks to rises in the hard-hit hospitality sectors.
But economists noted there were caveats to the upbeat
headline figures.
Even after two months of job recovery from May, the U.S.
economy has recovered only just over a third of a historic
plunge of 20.787 million in April.
A separate report on jobless claims, the most timely data on
employment, showed initial claims for state unemployment
benefits fell just 55,000 to a seasonally adjusted 1.427 million
for the week ended June 27.
The number of people receiving benefits after an initial week
of aid rose 59,000 to 19.290 million in the week ending June 20.
The momentum of recovery faces more headwind as a surge of
new coronavirus infections prompts U.S. states to delay and in
some cases reverse plans to let stores reopen and activities
resume.
More than three dozen U.S. states saw increases in COVID-19
cases, with cases in Florida spiking above 10,000. On the other hand, expanded unemployment benefits to support
those who lost their jobs due to the pandemic are due to expire
at the end of this month, though many investors think the
Congress could extend the measure.
"Back to pre-pandemic (job levels), in my view, will be a
matter of years," Danielle DiMartino Booth, CEO and chief
strategist of Quill Intelligence in Dallas, TX. "With luck, it
will be two years but that is likely optimistic given the number
of permanent closures we've learned of."
Sino-U.S. diplomatic tensions have also cast a shadow.
The U.S. State Department warned top American companies
including Walmart WMT.N , Apple AAPL.O and Amazon.com Inc
AMZN.O over risks faced from maintaining supply chains
associated with human rights abuses in China's western Xinjiang
province. "China will keep a hard line stance towards the next year
when the Chinese Communist Party will celebrate its 100th
anniversary since its founding," said Akira Takei, a bond fund
manager at Asset Management One.
"Global companies can no longer have supply chains in China
as they used to."
In foreign exchange, major currencies were little changed,
with the euro at $1.1245 EUR= and the yen changing hands at
107.52 per dollar JPY= .
Oil prices eased on concerns about the resurgence of the
coronavirus globally and in the United States, the world's
largest oil consumer.
Brent crude LCOc1 fell 0.65% to $42.86 a barrel while
U.S. crude CLc1 dropped 0.66% to $40.38 a barrel.

(Editing by Sam Holmes)

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (Australia) English (South Africa) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.