By Associated Press
Shares rose in Asia on Monday, cheered by expected upbeat projections for a global economic rebound that were tempered by worries over expanding coronavirus outbreaks.
Investors were looking ahead to the release of China’s economic growth data for April-June, a key indicator for trade, manufacturing and investments with implications for the entire region. Singapore is also releasing GDP data.
Japan’s Nikkei 225 /zigman2/quotes/210597971/delayed JP:NIK +0.18% rose 1.7% and Hong Kong’s Hang Seng index /zigman2/quotes/210598030/delayed HK:HSI +0.54% advanced 0.9%. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -1.04% gained 1.3% while the smaller-cap Shenzhen Composite /zigman2/quotes/210598015/delayed CN:399106 -1.90% surged 2.7%. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.24% rose 1.5% and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.11% edged up 0.4%. Stocks dipped in Singapore /zigman2/quotes/210597985/delayed SG:STI +0.36% but gained in Taiwan /zigman2/quotes/210597977/delayed TW:Y9999 -0.14% and Indonesia /zigman2/quotes/210597981/delayed ID:JAKIDX +0.40% .
On Wall Street, stocks had rallied at the end of a week of volatile trading amid worries that rising coronavirus counts may halt the recent upswing in share prices.
While investors are hoping for an improved outlook thanks to the reopening of the Chinese economy following its own early coronavirus outbreaks, share prices are much higher than justified by the numbers, analysts said.
“I do not think there will be any way to sugar-coat a disastrous Q2,” said Stephen Innes of AxiCorp. “Still, I am not sure how significant the numbers will be given the premise that investors are paying a top premium for technology stocks based on 2021 rebound earnings.”
On top of central bank policy meetings in Japan and elsewhere, corporate earnings are looming.
“According to FactSet, the estimated earnings decline for the S&P 500 index sits at -44.6%, representing a whole different world compared to the S&P 500 index that is approximately 6% away from its previous all time,” said Jingyi Pan of IG.
“Reconciliation between the two could take place going into the earnings season, although one suspect there may be some meeting in the middle here,” Pan said. “Better than expected recovery on the U.S. economic data front had so far inspired some convictions that the bar may have been set too low.”
On Friday, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.10% rose 1.4% to 26,075.30 while the Nasdaq composite /zigman2/quotes/210598365/realtime COMP +0.37% added 0.7% to 10,617.44, a new high.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.34% rose 1.1% to 3,185.04. It logged a 1.8% rise for the week, its second straight weekly gain.
After starting Friday with modest drops, stocks and Treasury yields erased their declines to drive higher. In a signal of rising expectations for the economy, the Russell 2000 index of smaller stocks rose more than the rest of the market, up 1.7%.
Last week’s meandering was a microcosm of the up-and-down churn that stocks have been stuck in for a little more than a month. The market’s momentum has stalled since early June, after the S&P 500 roared back to recover most of an earlier 34% plummet. Massive amounts of aid from central banks and governments around the world have ignited the rally.
In energy trading, benchmark U.S. crude oil dropped 32 cents to $40.23 a barrel. It rose 93 cents to $40.55 per barrel on Friday. Brent crude /zigman2/quotes/209705582/delayed UK:BRNU20 +0.05% also fell 32 cents to $42.92 a barrel.
The U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0525% slipped to 106.82 Japanese yen from 106.92 yen.