SINGAPORE- Asian stock markets rose on Tuesday while gold flirted near five-month highs ahead of European and US data this week that will likely offer clues on the health of the global economy.
The world’s recovery from the COVID-19 pandemic remains patchy with exports reviving but broader economic activity still dampened by new measures to contain fresh outbreaks.
China’s factory activity expanded at the fastest pace this year in May as domestic and export demand picked up, though sharp rises in raw material prices and strains in supply chains crimped some companies’ production, a business survey showed on Tuesday.
Taiwan and South Korea share indexes climbed in early trade while Japan, Australia and Hong Kong markets retreated, pushing up MSCI’s broadest index of Asia-Pacific shares outside Japan by 0.3 percent.
South Korea’s index jumped 0.8 percent and led regional gains after the country’s exports logged their sharpest expansion in 32 years in May, marking another robust month of shipments fueled by stronger consumer demand globally.
The MSCI Asia index rose to the highest in a month, taking total gains made so far this year to nearly 7 percent. World equities have risen for a fourth straight month as ample liquidity supported risk taking despite worries of higher inflation.
US stock futures were little changed after a holiday on Monday and following European share markets ending below record highs.
While asset markets have rallied last month, policymakers are increasingly focused on tackling inflation at a time when the underlying structural economy has been struggling to gain traction.
“The fixation of the markets now is on inflation and rightly so because of so much of quantiative easing and supply chain disruptions,” said Hou Wey Fook, chief investment officer at DBS Bank.
