ASIA STOCKS REBOUND ON POSITIVE STIMULUS REPORTS
Asian shares eked out gains and US stock futures bounced back on Friday as hopes of more government spending around the globe suppressed concerns about rising new coronavirus case numbers and worsening tensions between Washington and Beijing. Hideyuki Sano reported for Reuters late on Friday, July 17, 2020.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.5%, paring a quarter of its 2% losses the previous day, while Japan’s Nikkei was almost flat. In China, the CSI300 index climbed 1.1%, clawing back some of Thursday’s 4.8% slide and shrugging off news that Washington is considering banning travel to the US by all members of the Chinese Communist Party, which means prohibiting personalities like President Xi Jingping and billionaire Jack Ma.
Market watchers said investors are counting on US policymakers to adopt more stimulus measures as the world’s largest economy struggles to contain the epidemic, with some existing programs to support businesses set to expire within weeks.
“The sustainability of this rebound will be determined to a large degree by whether another fiscal deal is reached,” said ANZ bank analysts in Sydney in a note. US Congress is set to begin debating such a package next week, as several states in the country’s south and west implement fresh lockdown measures to curb the virus. “You would think such sharp rises in infections would normally lead to fall in stock prices but at the moment, that was being offset by strong hopes for vaccines,” said Tomo Kinoshita, global market strategist at Invesco in Tokyo. “But we now see higher risk of a market correction, considering the improvement in hard economic data we have seen over the past couple of months is likely to halt,” he said.