Asian Stocks Boost as Chinese Services Bracing
Major Asian stock exchanges advanced on Monday; Wall Street has shrunk since then. The survey showed that the decline in Chinese service activity in May was reduced. Antivirus control has been lifted in Shanghai and other major cities. Marks have risen in Tokyo, Shanghai, and Hong Kong. On Wall Street, the benchmark S&P 500 index lost 1.6% on Friday to higher interest rates, Also against the background of a possible economic downturn and job losses.
In May, the survey showed that China’s retail and other service industries declined. However, at a late pace than in the first month. The ruling Communist Party is allowing Shanghai stores, factories, and other businesses to resume operations after a two-month shutdown to fight the spread of the virus. Restrictions are easing in the capital, Beijing. Specific optimism steps may be derived from the further easing of virus restrictions in Beijing.
The Shanghai Composite Index rose to 3.233.73, for a total of 1.2%; After Caixin said its monthly purchasing managers index rose to 41.4 on a 100-point scale; Where a number below 50 indicates activity contraction.
Hang Seng increased by 1.4% and 21,379.67. The Nikkei 225 rose 0.7% in Tokyo to 27,956.19. Korean markets closed due to the holidays. The S&P-ASX 200 fell 0.3% to 7,215.90. New Zealand markets were closed for the holidays. Sensex opened 0.6% at 55.559.30. Southeast Asian markets have shrunk. The S&P 500 fell to 4,108.54 from its eighth weekly loss in the last nine weeks on Wall Street. The Dow lost 1% to 32,899.70. The Nasdaq was down 2.5% to 12012.73. Government figures show U.S. employers added 390,000 jobs in May, which exceeded the expectations of 322,500.
Stocks and Expectations
Investors do not care if the Federal Reserve raises interest rates to reduce inflation, which has been operating for a maximum of four decades; Maybe the U.S. economy will go into recession. The same government report showed that wages were slightly lower than in May. This may reduce future pressures for price increases. This will ease the pressure on the Fed to raise interest rates higher.
More than five of the S&P 500 shares fell. The most significant drop was in technical promotions. Tesla fell 9.2%; After U.S. safety regulators reported that more than 750 homeowners complained of sudden parking of vehicles on the roads for an unknown reason; When working on partially automated control systems.
The price of American crude oil for electronic trading on the New York Mercantile Exchange rose by 70 cents and reached $119.57 per barrel. The contract traded at $118.87 on Friday, winning $2. The basis of international oil prices, Brent crude, rose from $72 in London to $120.44 a barrel. They were closed $2.11 higher than the previous session at $119.72. The dollar fell to 130.72 yen. The euro rose to $1.0724.
European Shares
European stocks have revived since last week’s decline After China eased restrictions on Covid-19, which led to risk-taking. Stoxx Europe 600 increased by 0.9%. The easing of restrictions in Beijing has boosted bets that economic activity will increase. Commodity stocks jumped with oil and metals, And tech stocks have grown along with their Asian and U.S. counterparts. The FTSE 100 has gained 1.4% since U.K. markets resumed trading after the holiday, even when Boris Johnson is threatened by the voice of the leader of the ruling Conservative Party.
The bold central banks, rising inflation, and the war are among the wall of concern in Ukraine, Putting pressure on this year’s European allies. Investors are now looking forward to the European Central Bank meeting on Thursday; When announcing the completion of the bond purchase. It will also officially start counting down the cost of borrowing in July. Further opening of the Chinese economy will further strengthen the global sentiment. While the People’s Bank of China is doing everything to start the economy, People and companies will not spend while they are still locked in their homes.
Sanford C. Bernstein strategists said profit margin consensus remains elevated; Despite macro concerns, including growth slowdowns, the energy crisis, the war in Ukraine, rising rates, and China’s closure. They said the growing demand for sales should continue to balance input cost inflation. Otherwise, there may be a significant margin contraction on the horizon, especially in Europe. Meanwhile, investors sold European stocks for the 16th week; regional stocks will run $4.2 billion a week through June 1st.
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