Asia stocks rise on upbeat factory data


    TOKYO/WASHINGTON- Asian shares rose on Tuesday after strong US manufacturing data and gains in tech stocks helped investors look past broader worries about the coronavirus and global economy.

    MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.9 percent, while shares in China nudged up 0.1 percent. Australian stocks gained 2 percent for the biggest intraday gain since July 21. Tokyo shares also jumped by more than 1 percent.

    Oil futures gave up their overnight gains and fell in Asia due to nagging worries about an increase in the supply of crude. US stock futures were 0.02 percent higher in Asia.

    An industry gauge released overnight indicated US manufacturing activity expanded in July at the fastest pace in more than a year, which helped Wall Street shares rise on Monday.

    However, some investors remain cautious due to worries about a resurgence of the coronavirus and a diplomatic tussle over Chinese tech companies’ operations in the United States.

    “It has been an upbeat US trading session and Asia will absorb the leads accordingly,” Chris Weston, head of research at Pepperstone, said in a market note.

    On Monday the Dow Jones Industrial Average rose 0.89 percent, the S&P 500 gained 0.72 percent, and the Nasdaq Composite advanced 1.47 percent to set a record closing high as investors cheered the manufacturing data.

    That data also caused the US Treasury curve to steepen, an indication of improved investor sentiment.

    US stocks received an additional lift from Microsoft, which jumped 5.6 percent after it formally declared interest in buying the US operations of TikTok, a popular video-sharing app owned by Chinese tech company ByteDance.

    US President Donald Trump has threatened to ban TikTok unless its US operations are sold off from ByteDance.

    Washington is also preparing to take action against other Chinese software companies that could share user data with Beijing, setting the stage for further conflict.

    The dollar held steady against its counterparts as traders awaited progress in negotiations for additional economic stimulus.

    US House Speaker Nancy Pelosi will meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows on Tuesday to continue talks, raising hopes for a breakthrough sometime soon.

    The “only good thing we can say on the political impasse in Washington is that negotiations remain ongoing,” analysts at National Australia Bank said in a market note.

    Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more US government spending to support the economy, saying “demand trouble is brewing” as existing relief policies expire.

    Spot gold XAU was down 0.09 percent on Tuesday but still near a record high of $1,984.66 set on Monday amid support from virus fears. – Reuters