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Home / Business / Asian stocks up, mood still fragile after US GDP By Reuters

Asian stocks up, mood still fragile after US GDP By Reuters



© Reuters. FILE PHOTO: FILE PHOTO: An investor looks at an electronic board showing stock information in a brokerage in Shanghai

By Andrew Galbraith

SHANGHAI (Reuters) – Asian stocks rose on Monday after strong US growth in the first quarter increased to record highs. And the restoration was also backed by data showing surpluses of Chinese industrial companies for the first time in four months.

Still nagged by uncertainty over the outlook for the world economy, investors expected a meeting of the US Federal Reserve this week and Chinese factory data for further clues on policy direction in the world's largest economies.

The MSCI's broadest index for Asia-Pacific stocks outside of Japan increased by 0.38 percent, coming from the largest weekly decline for more than a month last week.

Chinese blue chips jumped 1

percent after losing 5.6 percent last week.

Australian shares were down 0.43 percent after beating an 11-year-old high on Friday, while Seoul was up 0.74 percent.

Japan's financial markets are closed for a long national holiday this week, but in Singapore, 0.85 percent were higher.

Monday's gains follow the data showing US gross domestic product grew faster 3.2 percent annual interest rate in the first quarter. In another positive note, Chinese data showed that industrial profits grew in March after four months of contraction, but analysts said the sentiment continued to be frail.

"Investors are still looking in the direction of growth, but at the same time there is still a great deal of uncertainty" about trading in the US and China and US dollars, says Joanne Goh, equity strategist at DBS Bank in Singapore.

"A strong dollar doesn't do anything good for Asian markets," she added. 19659004] Contrary to weakness in Asian markets last week, Wall Street ended Friday on a high note, driven by GDP figures.

It increased 0.31 percent to 26.543.33 and it increased, or 0.34 percent, to 8.146.40.

Stephen Innes, managing partner of SPI Asset Management, said that despite stronger than expected earnings that helped lift markets, he saw investors' positioning on S&P becoming "overly extended".

"We have turned from a state where there is a stock race, no one wants to participate, at a fearless pace where both hedge funds and investors continue to pursue to chase markets like greyhounds for the mechanical rabbit," he said in a note

While the strong US GDP data helped ease the fears of an impending downturn, investors noted that it was driven by a smaller trade deficit and a large accumulation of unsold goods, as consumer and business spending declined sharply.

Mars's Personal Expenditure Expenditure Examination (PCE), Fed's preferred inflation measurement, comes later on Monday, with the Central Bank's Federal Open Market Committee (FOMC) announcing its political decision on Wednesday, with Chairman Jerome Powell expecting to balance strong domestic growth data with persistent concerns over the global outlook

Markets will also look at global factory activity Surveys this week, special Equally official and private readings on Chinese production, both of which will be released on Tuesday.

SEARCHING FOR STIMULUS

Chinese companies return to profit growth in March doubted how much more stimulus Beijing can roll out without risking a rapid build-up of debt and potential property bubbles.

The hope that there will be more stimulus coming out of China is probably reduced, Goh said on DBS.

"So if the FOMC confirms that the Fed is continuing To be pretty tough about the outlook for the interest rate, I think investors will like it," she said.

With Japan on a longer break, foreign exchange markets were quiet ah ead by the FOMC meeting and US The dollar was flat against the yen at 111.60, and the euro was up 0.05 percent to $ 1.154.

Anyone tracking the greenback against a basket of six major rivals was 0.03 percent lower to 97.981.

pushed 0.5 percent to $ 62.98 a barrel, continued lower after US President Donald Trump pushed the Friday petroleum exporting organization to increase crude production to ease petrol prices.

fell 0.37 percent to $ 71.88 per barrel

was flat, traded at $ 1,285.78 per ounce. [GOL/]


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