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Asia shares set to gain after manufacturing data, tech stocks boost
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Passersby wearing protective face masks, following an outbreak of the coronavirus, walk past in front of an electric screen displaying Nikkei share average outside a brokerage in Tokyo, Japan March 2, 2020. REUTERS/Issei Kato (REUTERS/Issei Kato)
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sian shares were on track to open higher on Tuesday, after strong manufacturing data and gains in tech stocks boosted global equities and the US dollar overnight.
Hong Kong futures HSIc1 were up 0.65 percent and Nikkei futures NKc1 were above the Nikkei 225 index's previous close, pointing to an opening gain of about 0.88 percent. Australian shares were also poised to open higher.
Global equities, the dollar and oil futures kicked off the week with gains as manufacturing data from the United States, Europe and China indicated a factory recovery is holding up despite rising cases of COVID-19.
In the United States, manufacturing activity accelerated to its highest level in nearly 1-1/2 years in July as orders increased despite a resurgence in new infections, the Institute for Supply Management said.
US stocks received an additional lift from Microsoft, which jumped 5.6 percent after it formally declared interest in TikTok’s US operations on Sunday.
The Dow Jones Industrial Average rose 0.89 percent, the S&P 500 gained 0.72 percent and the Nasdaq Composite advanced 1.47 percent to set a record closing high.
“It has been an upbeat US trading session and Asia will absorb the leads accordingly,” Chris Weston, head of research at Pepperstone, said in a market note.
The manufacturing data lifted oil prices LCOc1 more than 1 percent and drove the US Treasury curve to steepen, an indication of improved investor sentiment.
Spot gold XAU was down 0.19 percent in early trade, retreating from a record high of US$1,984.66 set on Monday amid support from virus fears.
After wrapping up talks on Monday over another round of coronavirus economic stimulus, US House Speaker Nancy Pelosi said she will meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows the following day to continue the discussion.
The “only good thing we can say on the political impasse in Washington is that negotiations remain ongoing,” analysts at National Australia Bank said in a market note.
Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more US government spending to support the economy, saying “demand trouble is brewing” as existing relief policies expire.
Meanwhile, US President Donald Trump told reporters after the market close that a “permanent lockdown” policy is not a “viable path forward” to combating the coronavirus pandemic.
