This morning, Japan’s benchmark Topix index rose 1.2 per cent while Australia’s S&P/ASX 200 gained 1.3 percent. China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks was up 0.8 per cent while Hong Kong’s Hang Seng added 0.9 per cent. Futures markets predicted the S&P 500 to climb 0.2 per cent when US trading begins later in the day.
Chris Varvares, co-head of US economics at IHS Markit, told the FT it was “too early to tell” about new US coronavirus cases and deaths leading to lockdowns, which would be a blow to the economy later this year.
He said: “We are watching very closely the course of the pandemic and looking for a tipping point.
“Chinese equities were buoyed by a pick-up in activity at the country’s factories, with the official manufacturing purchasing managers’ index beating economists’ predictions in June.”
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6.11am update: China’s factory activity quickens, but pandemic drags on exporters and recovery
The official manufacturing Purchasing Manager’s Index (PMI) came in at 50.9 in June, compared with May’s 50.6, National Bureau of Statistics (NBS) data showed on Tuesday, and was above the 50.4 forecast in a Reuters poll of analysts.
The 50-point mark separates expansion from contraction on a monthly basis.
The uptick was underpinned by the quickening pace of expansion in production. The forward-looking total new orders gauge also brightened, rising to 51.4 from May’s 50.9, suggesting domestic demand is picking up as industries from non-ferrous metals to general equipment and electrical machinery all showed an improvement.
But export orders continued to contract, albeit at a slower pace, with a sub-index standing at 42.6 compared to 35.3 in May, well below the 50-point mark.