Tokyo: Global shares were mostly higher Wednesday as investors were encouraged by positive U.S. economic data, even while the coronavirus pandemic has regions around the world battling recessions.
France’s CAC 40 added 1.7 per cent in early trading to 5,023.62, while Germany’s DAX jumped 1.8 per cent to 13,204.32. Britain’s FTSE 100 rose 1.9 per cent to 5,970.36. U.S. shares were set for further gains with Dow futures rising 0.6 per cent to 28,790.0. S&P 500 futures rose to 3,550.62, up 0.7 per cent.
Investor sentiment was lifted by better-than-expected economic data overnight. The U.S. Commerce Department said construction spending in the U.S. edged higher in July, breaking a string of losses due to disruptions caused by the pandemic.
A positive tone had been assumed by Asia markets, finding inspiration from Wall Street with the gains notched overnight, said Jingyi Pan, market strategist at IG in Singapore.
Although the U.S. economy is nowhere near the state before the COVID-19 hit yet, these pieces of evidence of continued recovery nevertheless works in the favour of keeping the cautious optimism and the equity rally going, she said in a commentary.
Japan’s benchmark Nikkei 225 added 0.5 per cent to finish at 23,247.15. Australia’s S&P/ASX 200 rose 1.8 per cent to 6,063.20, even though the nation reported its worst drop in GDP ever, with a 7 per cent contraction in the April-June quarter, and is now in recession.
South Korea’s Kospi rose 0.6 per cent to 2,364.37. Hong Kong’s Hang Seng slipped 0.3 per cent to 25,120.09, while the Shanghai Composite inched 0.2 per cent lower to 3,404.80. Shares rose slightly in India and Thailand and were little changed in Taiwan.
Encouraging data as broad swaths of the economy have reopened this summer have helped stoke investor optimism about a recovery.
Investors will be looking for more clues on the state of the economic recovery this week, including the monthly U.S. jobs report on Friday.
Traders have been favouring technology stocks as the pandemic has dragged on, forcing millions of people to rely more than ever on internet-connected devices and online services for work, homeschooling and communication.
Benchmark U.S. crude added 39 cents to USD 43.15 a barrel in electronic trading on the New York Mercantile Exchange. It rose 15 cents to USD 42.76 a barrel on Tuesday. Brent crude, the international standard, gained 40 cents to USD 45.98 a barrel.
The U.S. dollar rose to 106.18 Japanese yen from 105.97 yen. The euro cost USD 1.1861, down from USD 1.1913.