Asian Stocks Boosted With Positive Chinese Data, But COVID-19 Worries Remain
By Gina Lee
Asian stocks were up on Tuesday morning in Asia and were poised to end the last day of the year’s second quarter with gains not seen since 2009.
China’s Shanghai Composite was up 0.47% by 11:23 PM ET (4:23 AM GMT) and the Shenzhen Component was up 1.50%, boosted by the country reporting a better-than-expected manufacturing Purchasing Manager’s Index of 50.9 for June. The figure indicates a second consecutive month of growth, with May’s manufacturing PMI of 50.6.
Hong Kong’s Hang Seng Index was up by 0.91%, retreating slightly from earlier gains after the National People’s Congress Standing committee passed national security laws for the city earlier in the day. Investors will be monitoring the U.S. reaction, with Commerce Secretary Wilbur Ross saying on Wednesday that the U.S. would suspend preferential treatment regulations for Hong Kong, which include export license exceptions.
The positive data from China was balanced with ever-rising COVID-19 numbers. Over 10.2 million cases globally as of June 30 according to Johns Hopkins University, and there is no forthcoming cure.
“It’s not clear what trajectory coronavirus is heading... 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,” Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told Bloomberg.
Meanwhile, U.S. Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will testify before the House Financial Services Committee later in the day.