Asian stocks advanced Tuesday, set to round out their best quarter since 2009 in a rebound from a devastating start to the year, as optimism about a recovery overshadows concerns over an increase in U.S. coronavirus cases.
Benchmarks rose more than 1% in Japan, Australia and South Korea. Hong Kong gains were more modest after the Trump administration suspended some trade benefits for the city over China’s new national security law for the financial hub. S&P 500 futures edged higher after the index erased its June decline in wake of positive U.S. home sales data. The dollar and Treasuries were little changed. Oil retreated.
Investors are weighing an improvement in economic data against a continued increase in cases. Following the stronger-than-forecast U.S. pending home sales figures Monday, China Tuesday reported improving purchasing-manager indexes for both manufacturing and services.
The MSCI All Country World Index is up about 18% this quarter, the biggest advance in 11 years — on the heels of the worst quarter since 2008. The rebound comes even as deaths from the virus surpass 500,000 and confirmed cases exceed 10 million, with the World Health Organization warning the worst is yet to come.
“It’s not clear what trajectory coronavirus is heading,” Tom Lee, co-founder and head of research at Fundstrat Global Advisors, said on Bloomberg TV. “But I also think because we’re into quarter-end, there’s been some re-balancing. So I’m kind of in the camp that any weakness is short-lived. I would think July is going to be a strong month for stocks.”
Here are some key events coming up:
- Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin testify before the House Financial Services Committee on Tuesday.
- The monthly U.S. jobs report will be released on Thursday.
These are some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 1:03 p.m. in Tokyo. The S&P 500 Index rose 1.5%.
- Euro Stoxx 50 futures rose 0.3% after a delayed start.
- Topix index rose 1.2%.
- Australia’s S&P/ASX 200 Index climbed 1.4%.
- South Korea’s Kospi index rose 1.8%.
- Hong Kong’s Hang Seng Index rose 0.9%.
- Shanghai Composite Index rose 0.6%.
- Note: trading in Euro Stoxx 50 futures was delayed for several hours.
Currencies
- The yen was little changed at 107.72 per dollar.
- The offshore yuan traded at 7.0654 per dollar.
- The euro was at $1.1238.
- Bloomberg Dollar Spot Index was flat.
Bonds
- The yield on 10-year Treasuries was little changed 0.63%.
- Australia’s 10-year bond yield held at 0.88%.
Commodities
- West Texas Intermediate crude fell 0.7% to $39.42 a barrel after a 3% gain.
- Gold was flat at $1,771.37 an ounce.
Source: Bloomberg