Asia shares mixed outlook on global economy | Economic news
By YURI KAGEYAMA, AP Business Writer
TOKYO (AP) – Asian stocks were mixed on Monday in cautious optimism about a global rebound from the coronavirus pandemic.
The Japanese benchmark quickly lost its first gains and fell 0.1% to 29,642.79, the market’s first reaction after Prime Minister Yoshihide Suga’s summit with President Joe Biden over the weekend. Suga also spoke with the chief executive of Pfizer, asking to ensure a more regular supply of the company’s COVID-19 vaccine. Japan has lagged behind other countries in rolling out the vaccine, with just 1% of its population vaccinated to date.
Government measures against COVID-19 infections already in some urban areas, including Tokyo, are being rolled out to more parts of Japan, as of Tuesday, but the cities of Tokyo and Osaka are planning to reinforce them until a “state of emergency”. Japan has never had a lockdown and its laws should be changed for such action.
Australia’s S & P / ASX 200 gained 0.4% to 7,093.20, while South Korea’s Kospi added 0.4% to 3,212.41. Hong Kong’s Hang Seng lost 0.4% to 28,856.21. The Shanghai Composite edged down 0.1% to 3,421.96.
Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, said that while the vaccine promised after Suga’s visit to the United States is a plus for Japan, their agreement to take a stronger stance on China adds to the investor concerns over the importance of China to the Japanese economy.
Suga had likely hoped Biden would voice more forcefully his support for the Tokyo Olympics, which are slated to open in July, despite widespread public concerns about the pandemic and opposition to hosting the Games. The joint statement refers to US support for “Japan’s efforts to organize a safe and secure Games.”
âThe Suga administration has taken a risk in relations with China, in accordance with the US request,â Maruyama said.
On Wall Street, the S&P 500 and the Dow Jones Industrial Average ended last week with new highs. The S&P 500 rose 15.05 points, or 0.4%, to 4,185.47, driven by gains in companies that depend directly on consumer spending, healthcare stocks and banks, which benefited higher Treasury yields.
The Dow Jones gained 164.68 points, or 0.5% to 34,200.67. The S&P and the Dow also hit all-time highs on Thursday. The highly technological Nasdaq rose 13.58 points, or 0.1%, to 14,052.34 after recovering from a first slide. The Russell 2000 Small Business Index added 5.60 points, or 0.2%, to 2,262.67.
US stocks have rallied in recent weeks amid a series of encouraging reports on hiring, consumer confidence and spending that point to an acceleration in the US economy. Vaccinations against COVID-19, which now reach half of the US population, and overwhelming support from the US government and Federal Reserve are fueling expectations of solid corporate earnings growth as more and more businesses will reopen.
The government’s latest round of stimulus has helped boost retail sales, and investors now have to weigh other proposals in Washington, which include infrastructure investments and possible tax changes.
Investors are also focusing on the global economic recovery. Earnings reporting season is approaching and expectations are high for companies to show they are recovering from the pandemic. Dozens of US companies are reporting results this week, including Coca-Cola, Johnson & Johnson, Verizon Communications, Dow Chemical and American Airlines.
In energy trading, benchmark US crude fell 35 cents to $ 62.78 a barrel. Brent crude the international standard fell 43 cents to $ 66.34 a barrel.
In currency trading, the US dollar fell slightly to 108.74 Japanese yen from 108.86 yen. The euro cost $ 1.957, compared to $ 1.1978.
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