Asian shares ride US optimism, China remains a concern

 

 

Tokyo: A rosy survey on factory activity in the US gave Asian share markets an early boost on Friday, though underlying concerns about China’s economic growth kept investors from rushing to buy riskier assets.

Japan’s Nikkei share average led the way, soaring 2.1% and Australian shares tacked on 0.6% to edge near a five-year peak hit in October. MSCI’s broadest index of Asia-Pacific shares outside Japan advance 0.4%.

On Wall Street, the S&P 500 rose 0.6% cheered by Markit’s preliminary US Manufacturing Purchasing Managers Index accelerating to its best level in four years.

The reading was an encouraging sign that a recent run of soft data will not derail the recovery in the US, with many analysts blaming the weak economic news on bad weather.

“The market thinks for now that underlying US economic trend remains strong and things will get better in the spring,” said Sho Aoyama, senior market economist at Mizuho Securities.

Still, there are concerns of renewed turmoil in emerging markets after a survey painted a grim picture of China’s manufacturing sector.

Stocks and currencies in some of those countries slipped after the China survey. Shares in Mexico hit three-month lows, while the rouble approached the five-year lows.

Worries about a slowdown in the Chinese economy and the US Federal Reserve’s tapering of its massive stimulus helped spark the recent selloff in emerging markets.

The 10-year US Treasuries yield edged up to 2.75%, extending its rise from three-month low of 2.57%.

The US dollar also recovered thanks to the strong US manufacturing survey, with the dollar’s index against a basket of currencies rising to 80.29 from a eight-week low of 79.927 hit on Wednesday.

That saw the euro slipping to $1.3718, from a seven-week high of $1.37735 hit on Wednesday, with a dip in the euro zone’s business surveys adding pressure on the single currency.

Against the yen, the dollar was little changed at ¥102.33.

US crude oil inched down from a four-month low touched on Wednesday on a smaller-than-expected fall in US heating oil stockpiles as well as the soft Chinese manufacturing survey. Reuters

 

md.aquil alam 

pgdm 2nd semester 

source ...live mint