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Asia shares set to gain after manufacturing data, tech stocks boost

Asia shares set to gain after manufacturing data, tech stocks boost

FILE PHOTO: A man wearing protective face mask, following an outbreak of the coronavirus disease (COVID-19), walks in front of a stock quotation board outside a brokerage in Tokyo, Japan, March 10, 2020. REUTERS/Stoyan Nenov

WASHINGTON: Asian shares were on track to open higher on Tuesday, after strong manufacturing data and gains in tech stocks boosted global equities and the U.S. dollar overnight.

Hong Kong futures were up 0.65per cent and Nikkei futures were above the Nikkei 225 index's previous close, pointing to an opening gain of about 0.88per cent. Australian shares were also poised to open higher.

Global equities, the dollar and oil futures kicked off the week with gains as manufacturing data from the United States, Europe and China indicated a factory recovery is holding up despite rising cases of COVID-19.

In the United States, manufacturing activity accelerated to its highest level in nearly 1-1/2 years in July as orders increased despite a resurgence in new infections, the Institute for Supply Management said.

U.S. stocks received an additional lift from Microsoft , which jumped 5.6per cent after it formally declared interest in TikTok's U.S. operations on Sunday.

The Dow Jones Industrial Average rose 0.89per cent, the S&P 500 gained 0.72per cent and the Nasdaq Composite advanced 1.47per cent to set a record closing high.

"It has been an upbeat U.S. trading session and Asia will absorb the leads accordingly," Chris Weston, head of research at Pepperstone, said in a market note.

The manufacturing data lifted oil prices more than 1per cent and drove the U.S. Treasury curve to steepen, an indication of improved investor sentiment.

Spot gold was down 0.19per cent in early trade, retreating from a record high of US$1,984.66 set on Monday amid support from virus fears.

After wrapping up talks on Monday over another round of coronavirus economic stimulus, U.S. House Speaker Nancy Pelosi said she will meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows the following day to continue the discussion.

The "only good thing we can say on the political impasse in Washington is that negotiations remain ongoing," analysts at National Australia Bank said in a market note.

Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more U.S. government spending to support the economy, saying "demand trouble is brewing" as existing relief policies expire.

Meanwhile, U.S. President Donald Trump told reporters after the market close that a "permanent lockdown" policy is not a "viable path forward" to combating the coronavirus pandemic.

(Reporting by Chris Prentice in Washington; Editing by Sam Holmes)

Source: Reuters

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