Asia stocks four months top of the markets, to remain stubbornly optimistic

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SYDNEY (Reuters) – Asian stocks cleared by four months on Wednesday as investors remained stubbornly optimistic about the prospects for a re-opening of the global economy, as well as cases of coronaviruses seeking to accelerate to new ones summits.

PHOTO FILE: A man wearing a protective mask, following a coronavirus disease (COVID-19) outbreak, walks in front of a board stock market outside a brokerage house in Tokyo, Japan , May 18, 2020. REUTERS / Kim Kyung-Hoon

MSCI’s wider Asia-Pacific equity index outside Japan added 0.5% to reach its highest level since the first cratered lockdown pandemic markets in early March.

South Korea led a 1.6% gain, while that of Japan’s Nikkei was held flat by a yen firm. E-Mini futures of the S&P 500 reversed at the start of gain losses of 0.2%, while the EUROSTOXX 50 futures lagged behind with a loss of 0.3%.

On Wall Street, the Dow Jones closed 0.5% on Tuesday, while the S&P 500 gained 0.4% and the Nasdaq gained 0.7%.

Coronavirus news was hardly encouraging with several states in the United States to see record of infections and death toll in Latin America, down from 100,000 to Tuesday, according to Reuters tally.

The European Union is even ready to take the helm of American travelers due to an increase in cases in the country, putting it in the same category as Brazil and Russia, the New York Times.

Still, the market assumes that there is a very high bar at closing economies again, so the impact on business activity will not be too great.

The unshakable optimism regarding the global economy has been supported by optimistic surveys of Europe’s manufacturing, with France a stand-out as the locking of the loosening it led to a modest return to growth.

That followed solid readings from most of Asia, although Japan did not disappoint.

“A surprise in recent data has been the resilience of activity data in emerging Asian countries as well as the global economy has slowed markedly and global demand remains below the pre-levels of the pandemic, ”said analysts at JPMorgan in a note.

“This result largely seems to be attributable to the non-tech outperforming tech sector, most likely, which in part reflects a temporary work-from-home boost on demand.”

The best of European data, combined with the mood risk of keeping the US dollar under pressure. Against a basket of major currencies, it slipped back to 96,578 from a high of 97,719 at the start of the week.

The euro edged up to $ 1.1320 from being as low as $ 1.1167 on Monday, while the dollar eased to 106.50 yen after hitting a six-week low of 106.06 at one stage.

“The dollar and the sense of risk are likely to remain largely negatively correlated, except for the US’s clear display and lasting leadership of the global economic recovery, something difficult to square with the grim US news on COVID,” said Ray Attrill, head of FX strategy at NAB.

The New Zealand dollar raised after the country’s central bank said it might have to do even more to stimulate the economy, including cutting rates more, expanding bond purchases or even the purchase of goods abroad.

In the commodity markets, the decline in the dollar and the infinity of low-priced central bank liquidity helped pull gold out to its highest since October 2012. The metal was last at $ 1,770 an ounce .

Oil futures have slowed from four-month highs after US crude inventories rose to a surprisingly high 1.7 million barrels last week, according to industry data. That compares with analysts’ expectations for one of 300,000 barrels to build. US government data will be released Wednesday.

Brent crude oil futures fell 8 cents to $ 42.55 a barrel, while US crude oil fell 20 cents to $ 40.17.

The edition by Jacqueline Wong and Sam Holmes

Our Principles:Thomson Reuters Confidence In Principles.

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