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Asia report: Markets advance as China beats manufacturing forecasts

Tue 30 June 2020 10:03 | A A A

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(Sharecast News) - Markets in Asia finished higher on Tuesday, as fresh data on China's manufacturing sector showed growth above expectations.

In Japan, the Nikkei 225 was up 1.33% at 22,288.14, as the yen weakened 0.16% against the dollar to last trade at JPY 107.75.

Of the major components on the benchmark index, robotics specialist Fanuc was up 1.56%, Uniqlo owner Fast Retailing added 1.75%, and technology giant SoftBank Group was 1.3% firmer.

The broader Topix index was 0.62% firmer by the end of trading in Tokyo, closing at 1,558.77.

In fresh economic data out of Japan, industrial production fell by 8.4% month-on-month in May on a preliminary basis, according to the Ministry of the Economy, Trade and Industry.

That fall was larger than the 5.6% predicted by economists in a Reuters poll.

On the mainland, the Shanghai Composite was ahead 0.78% at 2,984.67, and the smaller, technology-centric Shenzhen Composite jumped 1.88% to 1,975.52.

China's official purchasing managers' index showed growth for June, coming in at 50.9 for the month, above the 50.4 reading picked by economists polled by Reuters.

It was also a rise from the 50.6 reading released by the National Bureau of Statistics for May, suggesting the sector was indeed recovering from the Covid-19 lockdown.

A reading above 50 points marks expansion, while one below signals contraction.

"The news [has been] interpreted as wholly positive in the face of rising cases concentrated largely in Beijing and surrounding areas," noted economists at Rabobank.

"Having faced challenges fulfilling orders in the early stages of the crisis, the Chinese economy is now suffering from the drag of a demand pull-back as countries across the globe see their economies retrench as a result of their own domestic lockdown response."

South Korea's Kospi was 0.71% higher at 2,108.33, while the Hang Seng Index in Hong Kong rose 0.52% to 24,427.19.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 0.76% and chipmaker SK Hynix rising 1.79%.

The ongoing Covid-19 coronavirus pandemic was very much still the centre of attention throughout the Asian day, after World Health Organisation chief Tedros Adhanom Ghebreyesu told media in Geneva on Monday that the worst was yet to come.

"Although many countries have made some progress, globally, the pandemic is actually speeding up," he said.

"We all want this to be over; we all want to get on with our lives, but the hard reality is that this is not even close to being over."

Oil prices were lower at the end of the Asian day, with Brent crude last down 1.42% at $41.12 per barrel, and West Texas Intermediate off 1.36% at $39.16.

In Australia, the S&P/ASX 200 rose 1.43% to 5,897.90, while across the Tasman Sea, New Zealand's S&P/NZX 50 gained 1.76% to 11,451.05.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.28% at AUD 1.4603, and the Kiwi retreating 0.34% to NZD 1.5627.

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