SINGAPORE / BOSTON (Reuters) – Asian stock markets rallied on Tuesday thanks to relief that another round of Sino-American struggles did not seem to affect trade, while hopes for the stimulus of The US gave support to oil and commodity currencies.
FILE PHOTO: A man wearing a mask that covers his face, after an outbreak of a coronavirus (COVID-19) outbreak, steps in front of a stock quote outside a brokerage company in Tokyo, Japan, date 18 May 2020. REUTERS / Kim Kyung-Hoon
MSCI’s widest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS rose 1% last time. Japan’s Nikkei .N225 bounced back from the holiday with a 1.7 percent gain, led by healthcare and industrial stocks and the Hang Seng .HSI index rose 2.2 percent.
Risk-sensitive Australian and New Zealand dollars each rose by about 0.3%, although they sit comfortably below key recent peaks as some fears have damped their gains. [AUD/]
Investors are waiting for a meeting between top US and Chinese trade officials on Saturday to review the first six months of the Phase 1 trade deal.
With China lagging far behind its purchases of energy and agricultural goods from the United States, it could test the assumption of markets that the trade relationship is insulated from a rift diplomatic relationship. between two countries.
However, there was considerable relief on Tuesday that China’s sanctions against 11 US citizens – a response to US sanctions on Chinese individuals over the war. Beijing’s crackdown in Hong Kong – appears to have ended its latest round of tit-for-tat.
“It left the White House untouched,” said Vishnu Varathan, head of the economics division of Mizuho Bank in Singapore.
“That gives a little bit of relief that China is still giving some priority to dialogue (trade deal),” he said. “It’s just the feeling that you’re not shaking the boat to the point of capsizing, that’s today’s low.”
Safe shelters are under mild widespread pressure. Gold XAU = down about 0.6% to $ 2,015 / oz and the US bond market expands its recent sell-off, with yields on the standard 10-year Treasury US10YT = RR at a two-week high of 0 , 5870%.
REWARDS AND REWARDS
Wall Street found some support overnight after Trump signed an executive order to partially restore unemployment benefits after talks between the White House and top Democrats on new stimulus broke down last week.
The Dow .DJI was up 1% and the S&P 500 .SPX edged ahead, while the Nasdaq .IXIC sold off a bit as investors cut some of their technology holdings in favor of valuable stocks.
The S&P 500 is now 1% below a record high in February, while in Asia, the MSCI index outside Japan is within 2% of January’s all-time high.
These moves have pushed prices in Asia to sky-high levels, about 20% higher than the post-financial crisis average. But Nomura’s Jim McCafferty in Hong Kong says the lofty highs are evidenced by the big shift in investor preferences.
“The composition of stock market indices in the region has changed dramatically,” he said. “Oil, telecom companies and banks once dominated … it’s the internet and technology.”
The S&P 500 ESc1 futures rose 0.3 percent and oil traded firmly in the hope that a US stimulus deal is likely to be fulfilled and demand is expected to increase in Asia. [O/R]
Brent crude oil LCOc1 term rose 0.4% to $ 45.16 / barrel and US crude oil CLc1 increased by 0.6% to $ 42.18.
Besides the Aussie and the Kiwi, other major currencies have made very slight gains against the dollar while the yen inched lower.
Euro EUR = EBS last bought 1.1746 dollars and yen JPY = traded at 106.02 per dollar. [FRX/]
China’s credit data is due this week, while UK labor data and a German sentiment survey coming at 08:30 GMT and 09:00 GMT will provide the latest information. on Europe’s recovery.
Investors are expecting the UK unemployment rate to hit 4.2% in June and German economic sentiment will stabilize across the board.
Reports by Tom Westbrook in Singapore and Lawrence Delevigne in Boston; Edited by Sam Holmes and Richard Pullin