TOKYO (AP) — Asian shares advanced yesterday after China reported its economy expanded at an 18 per cent annual pace in the first quarter of the year.
Jubilance over positive Chinese and United States (US) economic data and another record high on Wall Street was tempered by caution over coronavirus outbreaks in the region, where rollouts of the vaccine have lagged.
Japan’s benchmark Nikkei 225 gained 0.1 per cent to finish at 29,683.37. Australia’s S&P/ASX 200 recouped earlier losses, rising 0.1 per cent to 7,063.50. South Korea’s Kospi added nearly 0.2 per cent to 3,199.88. Hong Kong’s Hang Seng added 0.6 per cent to 28,952.78, while the Shanghai Composite gained 0.7 per cent to 3,423.30.
The contrast between the speed of vaccine rollouts in the US and Asia has been striking. Nearly half of American adults have gotten at least one dose of the vaccine, and about 30 per cent of adults in the US have been fully vaccinated, according to the Centers for Disease Control and Prevention.
Japan, where inoculations for the public have barely started, has seen a resurgence of infections in recent weeks. The country’s western metropolis of Osaka reported over 1,200 new infections on Thursday, its highest since the pandemic began. A top ruling party official suggested the possibility of cancelling the Tokyo Olympics, set to start in July, if infections continue to surge.
“Nikkei 225 also lacked firm direction amid an indecisive FX trade, and as Japan considers stricter COVID-19 measures for areas surrounding Tokyo,” said Anderson Alvez, analyst at ActivTrades.
ING senior economists Prakash Sakpal and Nicholas Mapa said the markets are awaiting the outcome of a meeting between Japanese Prime Minister Yoshihide Suga and President Joe Biden, set for the weekend.
China’s economy expanded at a sizzling annual pace of 18.3 per cent in the first quarter of the year. But its rebound in factory and consumer activity following the coronavirus pandemic is levelling off, according to data released yesterday. The figures were magnified by comparison with early 2020, when China suffered its deepest contraction in decades.
On Thursday, Wall Street notched more milestones, as a broad market rally pushed the S&P 500 to an all-time high and the Dow Jones Industrial Average surpassed the 34,000 mark for the first time.
The S&P 500 rose 1.1 per cent to 4,170.42 for another fresh record. The Dow climbed 0.9 per cent to 34,035.99.
The Nasdaq composite added 1.3 per cent to 14,038.76, while the Russell 2000 index of smaller companies picked up 0.4 per cent, to 2,257.07.
The rally came as investors welcomed a raft of encouraging economic reports showing how hungry Americans are to spend again, how fewer workers are losing their jobs and how much fatter corporate profits are getting.
Expectations are very high on Wall Street that the economy – and thus corporate profits – are rebounding thanks to COVID-19 vaccinations and massive support from the US government and Federal Reserve. New data on retail sales and jobless claims on Thursday reinforced the view that the recovery is accelerating.
“Another day, another record,” Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli said. “The stock market continues to validate the optimistic forecasts from last year, which predicted a strong economy that was driven by consumers emerging from their homes, emboldened by vaccinations or by a belief that the worst of COVID was behind us.”
US retail sales jumped 9.8 per cent in March from February, blowing past economists’ forecasts for 5.5 per cent growth. Much of the surge was due to USD1,400 payments from the US government’s latest economic rescue effort hitting households’ bank accounts. Economists said that shows how primed people are to spend as the economy reopens and conditions brighten. That’s huge for an economy that’s made up mostly of consumer spending.
An encouraging read on the job market showed 576,000 people applied for unemployment benefits last week, well below the 700,000 that economists had forecast and down from 769,000 the prior week. It’s also the lowest number since the pandemic began.
Adding to the optimism, more big US companies reported even healthier profits for the first three months of 2021 than analysts had forecast. Expectations are already high for this earnings reporting season, which unofficially got underway on Wednesday and could result in the strongest growth in over a decade.
In energy trading, benchmark US crude gained 19 cents to USD63.65 a barrel in electronic trading on the New York Mercantile Exchange. It gained 31 cents to USD63.46 per barrel on Thursday. Brent crude, the international standard, added 21 cents to USD67.15 a barrel.
In currency trading, the US dollar rose to JPY108.89 from JPY108.73. The euro cost USD1.1968, down from USD1.1970.