Asian shares rose Monday as positive momentum from gains on Wall Street and signs of moderating US inflation extended this year’s rally in global stocks. The yuan gained after China’s central bank set a stronger-than-expected fix for the currency.
Equities in Shanghai gained more than 1% while Hong Kong-listed technology companies jumped over 3%. Shares of Asian electric-vehicle makers and related suppliers also climbed, benefiting from Tesla Inc. and BYD Co. setting sales records in the second quarter. Japan’s Topix index was on course for another gain that has the index repeatedly setting fresh highs back as far as mid 1990 amid improved confidence among big manufacturers. The gains in Chinese stocks Monday contrast with the 6% drop in MSCI Inc.’s China Index in the first half. While many investors remain wary of policy risks and Chinese tepid economic rebound, some are pointing at attractive valuations. US equity futures were flat in Asia after the Nasdaq 100 rose almost 2% last week and notched its best ever first-half of a year. The S&P 500 reached the highest since April 2022 and posted its best first half since 2019, with Apple Inc. hitting the $3 trillion milestone along the way. Traders were encouraged as data showed inflation is moderating, even if that comes at the expense of growth. The personal consumption expenditures price index, one of the Federal Reserve’s preferred inflation gauges, rose 0.1% in May. From a year ago, the measure stepped down to 3.8%, the smallest annual advance in more than two years. This kept action in the bond market subdued during the US session Friday and again on Monday in Asia, after what was an eventful first half for the rates market. Yields on policy sensitive three-year Australian government bond fell about nine basis points Monday ahead of a central bank decision Tuesday that is dividing economists and money markets on the prospects of a rate hike or a pause. Most major currencies were confined to narrow ranges versus the dollar. The yuan advanced after the People’s Bank of China once again set a stronger-than-expected fix for the currency, although it has since pared its gain. China’s Caixin manufacturing PMI data showed the world’s second-largest economy is still struggling to rebound. Traders were also weighing the implications of Chinese President Xi Jinping elevating a long-serving technocrat as the central bank’s top Communist Party official, which may indicate no drastic shifts in policy for now. The yen fell and remained this year’s worst performing Group-of-10 currency, with traders watching for any central bank intervention should the yen depreciate further. Oil steadied as the second half kicked off, with traders focused on challenges to demand and a complex supply outlook.
Nikkei +1.62% Hang Seng +1.90% CSI +1.39% Shanghai +1.35% Shenzen +0.55%
Eur$ 1.0914 CNH 7.2533 CNY 7.2439 JPY 144.51 GBP 1.2703 CHF 0.8950 RUB 89.3148 TRY 26.0145 WTI$ 70.66 +0.03% Gold 1,919.60 +0.01%BTC 30,710 +0.38% ETH 1,947 +1.51%
S&P -0.01% Nasdaq +0.10% EuroStoxx +0.20% FTSE+0.34% Dax +0.13% SMI +0.14%
Macro :
- EU Agreement on Consolidated Tape Offers Wider Equity Access
- Goldman Returns to Higher Default Call for China Property Junk
- Fundstrat’s Lee, Already Most Bullish, Boosts S&P 500 Target
- Bond fund giant Pimco prepares for ‘harder landing’ for global economy
- Biden Met Chinese Ambassador Xie Friday, Discussed Relations
- UK to Set Emissions Trading Scheme Cap Consistent With Net Zero
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