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Asia report: Markets finish higher after solid China data

By Josh White

Date: Wednesday 03 Jun 2020

Asia report: Markets finish higher after solid China data

(Sharecast News) - Markets in Asia were higher across the board on Wednesday as investors cheered the ongoing reopening of economies amid the Covid-19 pandemic, although fresh data showed Australia's economy contracting in the latest quarter.

In Japan, the Nikkei 225 was up 1.29% at 22,613.76, as the yen weakened 0.06% against the greenback to last trade at JPY 108.75.

Technology giant SoftBank Group fell 1.23%, while among the benchmark's other major components, automation specialist Fanuc rose 1.16% and Uniqlo owner Fast Retailing was 2.9% higher.

The broader Topix index was ahead 0.72% by the end of trading, closing at 1,599.08.

On the mainland, the Shanghai Composite eked out gains of 0.07% to 2,923.37, and the smaller, technology-focussed Shenzhen Composite was 0.04% firmer at 1,847.38.

China's service sector bounced sharply in May, according to fresh data, with the unofficial Caixin/Markit services purchasing managers' index (PMI) rising to 55 for the month.

That was a decent gain from the 44.4 reading in April, and well above the 50-point level that separates expansion from contraction.

Beijing's official non-manufacturing PMI was also in expansion territory, rising to 53.6 in May from 53.2 in April, according to the National Bureau of Statistics.

"Backlogs of work fell for the third month in a row, as the Chinese economy continued its recovery from its February lockdown," noted CMC Markets analyst Michael Hewson.

"This positive spillover looks set to continue here in Europe, as markets extrapolate out the improvements seen in the latest China data into the rest of the world."

South Korea's Kospi added 2.87% to 2,147.00, while the Hang Seng Index in Hong Kong advanced 1.37% to 24,325.62.

Both of the blue-chip technology stocks saw stellar gains in Seoul, with Samsung Electronics up 6.03% and chipmaker SK Hynix adding 6.48%.

The gains in Korea came after the government took the wraps off a KRW 35.3trn stimulus budget, taking the total amount being spent on Covid stimulus to KRE 270trn.

Oil prices were higher at the end of the Asian day, with Brent crude last up 1.37% at $40.11 per barrel, and West Texas Intermediate 1.87% stronger at $37.50.

In Australia, the S&P/ASX 200 was ahead 1.83% at 5,941.60, as fresh data showed the country's GDP as falling by 0.3% on a seasonally-adjusted basis for the March quarter.

Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.76% to 11,118.27, led higher by film industry technology company Vista Group International, which leapt 21.4%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.03% at AUD 1.4495, and the Kiwi advancing 0.38% to NZD 1.5637.

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