· Asian shares hit four-month high as U.S., China recoveries gather pace
Asian shares rallied to a four-month high on Friday on robust U.S. payrolls data and a brisk pickup in Chinese service sector activity, but a surge in coronavirus cases in the United States kept a lid on stronger gains.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.66%, reaching the highest level since late February, while Japan’s Nikkei rose 0.40%.
Mainland Chinese shares, which were among the best performers over the past month, extended gains, with the Shanghai composite index hitting a high last seen in April 2019.
· Japan shares rise on upbeat US jobs data; virus spike in Tokyo checks gains
Japanese stocks ended higher on Friday as strong U.S. jobs data provided assurance that recovery in the world’s largest economy was well under way, though investors remained cautious as Tokyo reported a spike in COVID-19 cases.
The benchmark Nikkei average rose 0.7% to close at 22,306.48, taking a positive cue from a record surge in U.S. June payrolls and Wall Street’s overnight rally. But for the week, it was down 0.9%.
Japan’s capital city of Tokyo confirmed more than 100 COVID-19 cases, its highest daily tally in two months, for two days in a row on Friday.
Although chief cabinet secretary said there was no need to reintroduce a state of emergency, traders said fund managers were adjusting portfolios for a possible redeployment of coronavirus-induced restrictions.
The broader Topix added 0.6% to 1,552.33, with one-third of the 33 sector sub-indexes on the Tokyo exchange finishing lower, however.
· China's blue-chip index hits five-year high on hopes of recovery, stimulus
China stocks rose for a fourth straight session on Friday, with the blue-chip index scaling a five-year high on hopes of recovery in the world’s second largest economy as Beijing rolled out more stimulus.
The Shanghai Composite index closed up 2.01% at 3,152.81, while the blue-chip CSI300 index climbed 1.93% to 4,419.60 points, its highest since July 1, 2015.
China’s services sector expanded at its fastest pace in over a decade in June as the easing of coronavirus-related lockdown measures revised consumer demand, a private survey showed on Friday, though companies continued to shed jobs.
The rebound suggests China’s overall recovery is becoming more balanced and broader based as life slowly returns to normal, though analysts believe it will take months for activity to return to pre-crisis levels.
· European markets mixed on upbeat economic data surprises, U.S. coronavirus spike
European stocks were muted Friday morning following upbeat economic data out of the U.S. and China, while a spike in U.S. coronavirus infections tempered optimism.
The pan-European Stoxx 600 hovered just above the flatline in early trade, with tech stocks adding 0.9% to lead gains while banks fell 0.6%.
Market focus remains attuned to news of a resurgence in coronavirus cases stateside, with a Reuters tally showing that the U.S. reported more than 55,000 new cases on Thursday, a global daily record. Top White House infectious disease expert Dr. Anthony Fauci cautioned Thursday that the virus may have mutated to become more infectious.
Back in Europe, German car sales plunged 40% in June to a 30-year low, according to German newspaper Tagesspiegel. Meanwhile, British factories are increasingly expecting to lay off workers, a survey from sector group Make U.K. showed Friday, with 46% of manufacturers expecting to make redundancies within the next six months, rising from 25% in May.
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