TOKYO: Asian shares rose on Tuesday as investors looked to a barrage of economic data around the world to confirm recent signs the global economy is in fine fettle with inflation staying well contained.
Spreadbetters expected a mostly stronger start for European shares, forecasting Britain’s FTSE to open 0.5 per cent higher, Germany’s DAX to start up 0.1 per cent and France’s CAC to open little changed.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7 per cent, led by gains in financials and energy shares and coming within a whisker of last Thursday’s heights not seen since January 2008, while Tokyo’s Nikkei rose 0.2 per cent.
Hong Kong’s Hang Seng added 0.7 per cent, touching its highest since June 2015, and the Hang Seng China Enterprises index was up 1.8 per cent and at its highest since August 2015.
Strong inflows from mainland investors via the stock connect programme linking Hong Kong and the mainland are seen to be helping drive the recent rise in Hong Kong stocks.
Australian stocks advanced 0.9 per cent on the strength of financials and materials shares.
On Wall Street, the Dow Jones Industrial Average rose 0.28 per cent to end at a record high of 21,891.12 but the Nasdaq Composite pulled back 0.42 per cent after its recent rallies.
MSCI ACWI, an index of the world’s 47 stock markets, logged its ninth consecutive month of gains in July, the longest winning spell since 2003-04, on the back of expectations of solid global economic growth.
On the other hand, softening US inflation in recent months prompted investors to bet the Federal Reserve will adopt a patient approach to further interest rate increases.
A private survey showed growth in China’s manufacturing quickened in July, as output and new orders rose at the fastest pace since February on strong export sales. South Korea’s trade data also showed the country’s exports grew at robust pace in July, led by shipments of memory chips and electronic storage devices.
All of these data will be followed by preliminary flash estimates of euro zone gross domestic product at 0900 GMT, and then US spending and manufacturing data, due at 1230 GMT and 1400 GMT respectively.
In the currency market, the euro traded at $1.1832, having risen to as high as $1.1846, its best level since January 2015, with a test of $1.20 within sight.
It has gained almost 15 per cent from its January 3 low of $1.0340, which was its weakest level since January 2003, on rising expectations that the European Central Bank will taper its stimulus next year. The dollar also slipped to a 1-1/2-month low of 110.005 yen, and last stood at 110.18 yen, down 0.1 per cent.
The dollar’s index against a basket of six major currencies was at 92.878, not far from a 13-month low of 92.784 plumbed overnight. The index had marked its fifth straight monthly decline in July, the longest consecutive retreat since its losing run marked from the end of 2010 through early 2011. The Australian dollar gained 0.4 per cent to $0.8034, helped by the strong Chinese data, ahead of the Reserve Bank of Australia’s policy announcement later in the day. The RBA is widely expected to keep interest rates on hold. — Reuters
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