High Hopes on Growth Pave Way for Asian Shares to Rise

ASIAN SHARES

ASIAN SHARES

Strong gains in global equities just overnight have made the Asian shares shoot up, especially after hard manufacturing data from the United States, and as leading Asian exporters offset signs of mild recession in Europe.

Australian shares were strengthened Monday after oil prices gathered 2 percent, although oil withdrew from this session. Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investments said, “The current market environment is favorable in that it is inching higher while digesting caution and concerns about growth prospects, which suggests sentiment is actually quite solid”.

Stronger Than Expected

MSCI’s broadest index of Asian shares outside Japan gained 0.5 percent while a yen remained firm. This has hurt Japan’s Nikkei average and it fell 0.5 percent moving further away from a one-year high hit last week. Tetsu Emori lso commented, “One good indicator for growth is oil price, which has remained supported in part by supply disruption concerns, but its firmness is also driven by demand accompanying economic recovery”.

U.S. factory data, which has been stronger-than-expected, pushed U.S. stocks to 4 year highs, though European shares recorded their biggest daily gain in three weeks despite sluggish factory activity in the euro zone. Bae Sung-young, an analyst at Hyundai Securities in Seoul said, “The U.S. stock rally will definitely lend a hand. Worries of a slowdown in China’s economy are starting to settle”.

U.S. Manufacturing Sector Growing at a High Pace

U.S. manufacturing sector has been growing at a high pace as reported by the Institute for Supply Management. The manufacturing sector picked up from 52.4 in February to 53.4 in March, above a 53.0 forecast. Oil broke from strong gains Monday, with Brent crude futures easing 0.3 percent at $125.07 a barrel after settling up $2.55, while U.S. crude was down 0.3 percent to $104.96 a barrel, after settling up $2.21.It was truly a surprise jump in large factory activity in China and stronger manufacturing in other leading exporters, South Korea and Taiwan, but output was still far from robust.

Barclays Capital analysts said, “Global industrial production is unlikely to resume an uptrend just yet and while the downtrend persists, this remains in a stabilization phase. We remain comfortable with our view that U.S. cyclical out performance will continue to support the USD against low yielding developed market currencies, as well as the CAD against other commodity currencies”.

Investors are likely to remain alert about taking aggressive risks, ahead of key data including U.S. nonfarm payrolls on Friday and China’s first quarter gross domestic product due next week. The U.S. Federal Reserve’s Federal Open Market Committee is expected to issue minutes from its meeting of March 13.

Asian credit markets firmed, with the spread on the iTraxx Asia ex-Japan investment-grade index narrowing by 2 basis points. Shanghai markets closed through Wednesday while European, U.S. and some Asian markets will close on Friday for the long Easter weekend.

Aubrey Chang
Aubrey Chang, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

Recent Posts

Citizens Financial to acquire Investors Bancorp in $3.5 billion NYC push

Citizens Financial to acquire Investors Bancorp in $3.5 billion NYC push

Citizens Financial Group, Inc. and Investors Bancorp announced today that they have entered into a definitive agreement and plan of merger in a cash-and-stock deal worth $3.5 billi
16 hours ago
Apple Q3 Earnings Break Records Again!

Apple Q3 Earnings Break Records Again!

Apple Q3 earnings prove the Cupertino giant remains unaffected by the Covid-19 pandemic as sales rise across all product lines.
18 hours ago
Strong iPhone 12 sales could boost Apple’s Q3 2021 earnings

Strong iPhone 12 sales could boost Apple’s Q3 2021 earnings

Will Apple manage to post solid earnings in Q3 2021? Here’s what Wall Street’s top analysts have to say ahead of Apple’s Q3 2021 earnings report today.
2 days ago
Tesla earnings top $1 billion for the first time

Tesla earnings top $1 billion for the first time

Tesla earnings not only blew past analyst expectations but also marked the first time the automaker’s quarterly profit joined the three-comma club.
2 days ago
Elon Musk tweet pushes Dogecoin prices up again

Elon Musk tweet pushes Dogecoin prices up again

Dogecoin was launched as a joke in 2013. The cryptocurrency is up a staggering 6,000% compared to last year’s prices due to wild speculations.
2 days ago
Amazon to hire a crypto lead, may soon accept payments in cryptocurrency

Amazon to hire a crypto lead, may soon accept payments in cryptocurrency

The product lead will develop the full marketing strategy from customer experience to technical development to launching it.
3 days ago