Asian stocks rebound on strong Chinese data, oil on slippery slope

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SYDNEY (Reuters) – Asian stocks rebounded from their one-month lows on Monday on strong data from China showing factory activity increased at its fastest pace in a decade, while prices oil has slipped as many Western countries slipped back into lockdowns due to coronaviruses.

FILE PHOTO: Passers-by wearing face masks walk past a screen displaying Nikkei stock average and global stock indices outside a brokerage house, amid the coronavirus (COVID-19) outbreak, in Tokyo, Japan on October 5, 2020. Photo taken with slow shutter speed. REUTERS / Issei Kato

Largest MSCI Asia-Pacific Equity Index outside of Japan .MIAPJ0000PUS climbed 0.5% to 573.04, as China’s Caixin / Markit Manufacturing Purchasing Managers’ Index offered hope that the region’s success in containing the coronavirus could spare it the economic pain inflicted on it. Europe and the United States.

All major indexes except New Zealand were up on Monday.

Australian stocks .AXJO increased by 0.4%.

Chinese shares were higher with blue chip CSI300 .CSI300 up 0.8%, with the country’s vast industrial sector steadily returning to levels seen before the COVID-19 pandemic crippled huge swathes of the economy.

Nikkei du Japon .N225 jumped 1.5%.

Future E-Mini for the S&P 500 SC1 added 0.1%, with the focus on investors looking to Tuesday’s US presidential election.

The global outlook is clouding as many western countries continue to battle COVID-19 infections and return to virus lockdowns.

Global coronavirus cases topped 500,000 last week, with Europe crossing the grim milestone of 10 million infections in total. The UK grapples with more than 20,000 new cases a day, while a record increase in cases in the US kills up to 1,000 people a day.

New coronavirus-induced lockdowns have raised concerns about the outlook for fuel consumption, sending Brent LCOC1 to a low of $ 35.74 per barrel, a level not seen since the end of May. US crude fell to $ 33.64.

Disappointing outlook and results for some of Wall Street’s biggest companies last week, including Apple AAPL.O and Facebook FB.O, further worsened the mood and lowered US stocks last week.

“Markets look to the fourth quarter and early 2021, where growth prospects appear bleak given the shift to tighter lockdowns in Europe,” Perpetual analysts wrote in a note.

According to them, a -1% impact on European growth would lower global gross domestic product by 0.5% over the next 12 months.

“The key question here is how long the lockdowns are needed to bring the virus under control.”

Ahead of the final campaign weekend, Republican President Donald Trump is following Democratic challenger Joe Biden in national opinion polls in part because of widespread disapproval of Trump’s handling of the coronavirus.

Opinion polls in the more competitive states that will decide the election have shown a tighter race, still in favor of Biden.

In foreign currencies, the Australian dollar is sensitive to risk AUD = D3 slipped 0.4% to below 70 cents US for the first time since July. It was the last at $ 0.7018.

Japanese yen JPY = was stable at 104.66 per dollar, while the British pound GBP = was last a shade lower at $ 1.2931. The euro EUR = was barely changed to $ 1.1640.

That left the dollar index, which measures the greenback against a basket of peers, flat at 94.07. = USD

A resumption of risk after the US election, however, could see the dollar resuming its fall from March highs, analysts said.

JPMorgan analysts said the market likely views a Biden win as “neutral in the short term” but “negative in the long term” because his expected fiscal policy outweighs the benefits of a broad stimulus package.

“SPX may have an advantage at ~ 3400, but it would have a bigger disadvantage depending on the details of the package, potentially at ~ 2500,” they added.

Friday, the S&P 500 .SPX lost 1.21% to close at 3269.96. The Nasdaq composite .IXIC fell 2.45% while the Dow .DJI fell 0.6%.

Reporting by Swati Pandey; Editing by Christopher Cushing and Ana Nicolaci da Costa

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