Asian markets higher after Wall St rises on better US data

AP – Most Asian stock markets rose yesterday after Wall Street gained on surveys showing better United States (US) jobs and manufacturing conditions than expected.

Tokyo, Sydney and Southeast Asia advanced while Shanghai declined. Hong Kong recovered from early losses and was unchanged at midday.

Stock markets rose on optimism about a possible global recovery from the coronavirus pandemic as more economies reopen despite rising case numbers in the US, Brazil and other countries.

Wall Street turned in its fourth straight gain after surveys on Wednesday showed employers cut fewer jobs than forecast last month and a US manufacturing downturn eased slightly.

“The not too bad news keeps coming, enabling the hopes for economic rebound alongside the reopening,” said Jingyi Pan of IG in a report.

A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between USD and KRW at a foreign exchange dealing room in Seoul, South Korea. PHOTO: AP

The Nikkei 225 in Tokyo rose 0.4 per cent to 22,695.74 and Sydney’s S&P-ASX 200 gained 0.8 per cent to 5,989.60.

The Shanghai Composite Index shed 0.1 per cent to 2,920.33. The Hang Seng in Hong Kong was unchanged at 24,334.41.

The Kospi in Seoul rose 0.1 per cent to 2,149.10 and India’s Sensex dropped 0.5 per cent to 33,928.54. New Zealand, Singapore, Jakarta and Bangkok advanced.

On Wall Street, the S&P 500 rose 1.4 per cent on Wednesday to 3,122.87. The index gained nearly 40 per cent since late March.

The Dow Jones Industrial Average gained two per cent to 26,269.89. The Nasdaq composite rose 0.8 per cent to 9.682.91.

A survey from payroll processor ADP said private employers cut nearly 2.8 million jobs last month, but that was much milder than the 9.3 million that economists told investors to expect.

That raises optimism that today’s more comprehensive jobs report from the US government may also not be as bad as feared. Economists said it may show a loss of eight million jobs, which would be a deceleration from April’s loss of 20.5 million jobs.

Other reports showed the US economy is in bad shape but not as dismal as forecast.

One report said services industries contracted by less than economists expected, and at a more modest rate than in April. Another report said factory orders dropped 13 per cent in April, but not by as much as the 14.8 per cent that economists forecast.

Companies that would most benefit from a growing economy led the market on Wednesday, continuing a recent trend as hopes rise that the economy and life in general can become closer to normal as business-shutdown orders lift.

Stocks have been climbing since late March, at first on relief after the Federal Reserve and Congress promised massive amounts of aid for the economy.

More recently, the driving force has been optimism that growth can resume as states across the country and nations around the world lift restrictions on businesses intended to slow the spread of the outbreak. Widespread protests around the country following the killing of George Floyd haven’t dented the rally. One worry is that by bringing so many people together, the protests could also lead to more coronavirus infections.

Many professional investors have been warning that the stock market’s rally may have been too much, too soon.

The recovery for the economy is likely to be much slower than the sharp rebound the stock market has just undertaken, which could be setting investors up for disappointment.

In energy markets, benchmark US crude lost 81 cents to USD36.48 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the benchmark for international oils, shed 61 cents to USD39.18 per barrel in London.

The dollar gained to JPY109.05 from Wednesday’s JPY108.90. The euro advanced to USD1.1220 from USD1.1215.