Asian stocks march higher on recovery hopes

Asian markets higher after strong European, US PMIs

The day has started very positively for Asian stock markets after firm PMI data globally spurred Wall Street higher. Both the Markit and ISM Manufacturing PMI’s for July outperforming at 50.9 and 54.2, respectively. The Nasdaq briefly touched a new record high on its way to a 1.47% gain. Interestingly, it stopped around the area of the double top on the charts. It is worth monitoring if it does not trace out further increases in the days ahead. The S&P 500 meanwhile, finished 0.72% higher, with the Dow Jones rallying 0.89%.

Asia is a sea of green today, with the Nikkei 225 higher by 1.4% and the Kospi climbing 1.20%. Geopolitical worries seem to be muting the bullish mood in China, at least initially, with both the Shanghai Composite and CSI 300 flat in early trading. The Hang Seng, though has climbed 0.40%.

Across regional Asia and Australia, the picture is bright, though. Singapore and Jakarta have climbed 0.60%, with Taiwan up 0.40%. After a tough couple of days, Australia has found its feet. The ASX 200 has jumped 1.70%, and the All Ordinaries has leapt 1.85% ahead of an expected to be very dovish RBA later today. Unless a surprise headline hits the wires today, we expect the positive tone to continue.

US Covid-19 new infections also gave some cause for tentative cheer, with cases across the southern and western hotspots coming in at less than 50,000 for the second day running. Hopes rose that the US might avoid a deeper recession, which was all financial markets needed to send equity markets higher.

Europe also enjoyed a strong session overnight as well on the back of the PMI data. Italian, French, German and United Kingdom manufacturing PMI’s all climbed further into expansionary territory The price action today, therefore, in the absence of new drivers, is likely to be consolidative, but still positive.

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Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific, from 2016 to August 2022
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley was OANDA’s Senior Market Analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV and Channel News Asia as well as in leading print publications such as The New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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