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Asia report: Most markets rise as China services sector surges

By Josh White

Date: Wednesday 04 Aug 2021

Asia report: Most markets rise as China services sector surges

(Sharecast News) - Most markets in Asia closed in the green on Wednesday, with the exception of Japan, as fresh data on China's services sector blasted past expectations.
In Japan, the Nikkei 225 was down 0.21% at 27,584.08, as the yen weakened 0.13% against the dollar to last trade at JPY 109.18.

Technology conglomerate SoftBank Group was down 1.07%, while among the benchmark's other major components, automation specialist Fanuc managed gains of 0.58%, and fashion firm Fast Retailing added 0.71%.

The broader Topix index was 0.5% weaker by the end of trading in Tokyo, settling at 1,921.43.

On the mainland, the Shanghai Composite was ahead 0.85% at 3,477.22, and the smaller, technology-heavy Shenzhen Composite added 1.72% at 2,465.62.

China's services sector was more than buoyant in July, with data released overnight surging ahead of market expectations.

The Caixin/Markit services purchasing managers' index (PMI) rocketed to 54.9 in July, from 50.3 in June, well above the consensus forecasts for a minimal rise to 50.5.

In the survey, panellists suggested that containment of the virus domestically helped boost demand.

"It's positive that demand seems to be raring to go, in the right conditions, but we are wary of reading that as sustainable, for now," said Pantheon Macroeconomics chief Asia economist Freya Beamish.

"July seems to have benefitted from a lull in Covid damage between the initial Delta scare, and the renewed, and alarming, pick-up in cases in the last part of the month, much of which happened after the data collection period of 12 to 22 July, though numbers were already rising during the survey.

"The index seems likely to drop back in the current month as widespread restrictions are reimposed to tackle Delta."

South Korea's Kospi jumped 1.34% to 3,280.38, while the Hang Seng Index in Hong Kong rose 0.88% to 26,426.55.

Technology plays in the special administrative region bounced after heavy losses on Tuesday, with Tencent closing ahead 2.42%.

The blue-chip technology stocks were stronger in Seoul as well, with Samsung Electronics up 1.84%, and SK Hynix ahead 0.83%.

Oil prices were mixed at the end of the Asian day, with Brent crude last up 0.04% at $72.44 per barrel, while West Texas Intermediate was down 0.26% at $70.38.

In Australia, the S&P/ASX 200 managed gains of 0.38% at 7,503.20, while across the Tasman Sea, New Zealand's S&P/NZX 50 was 0.76% firmer at 12,797.29.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.31% at AUD 1.3481, and the Kiwi advancing 0.79% to NZD 1.4137.

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