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Asian stocks rise on tech and China data

Asian equities mostly advanced on Tuesday as firmer Chinese factory activity and continued enthusiasm for technology shares supported sentiment at the end of a strong quarter for regional markets. Wall Street had already set a positive tone on Monday, with US stocks closing higher on a tech-led rebound. The US dollar was slightly firmer, while gold fell 1.3% to around USD 3960 an ounce on Tuesday, its weakest level since November, leaving the metal down more than 12% in June and on course for a fourth straight monthly decline. Bitcoin remained below USD 60,000. Investors will now turn their attention to inflation data from France and Germany and to the US JOLTS report and consumer confidence figures later on Tuesday.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Strategist China
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China’s official manufacturing PMI rose to 50.3 in June from 50.0 in May, returning to expansion and exceeding expectations, according to data released on Tuesday. The improvement was driven by stronger high-tech output linked to AI-related demand and firmer external orders, with the production index rising to 51.4 from 50.7, new orders to 51.2 from 49.8 and new export orders to 50.1 from 47.5. China’s non-manufacturing PMI also edged up to 50.2 from 50.1, although construction remained in contraction at 49.0 and property-related activity and consumer demand stayed weak. The figures suggest China’s industrial sector is still being supported by exports and advanced manufacturing, even as policymakers have so far avoided major stimulus measures to bolster domestic demand. China’s CSI 300 gained 0.8% on Tuesday, while Hong Kong’s Hang Seng Index was down 1.3%.

Asian stocks rise on tech

Asian equities mostly advanced on Tuesday, with Japan and South Korea leading gains as strong demand for technology shares left regional markets on course for one of their best quarters in years. Japan’s Nikkei 225 rose 1.7% and was set for a quarterly gain of over 36%. Meanwhile, the Japanese yen fell to 162.3 against the US dollar on Tuesday, its weakest level since 1986, prompting renewed concern that Japan’s authorities could step into the foreign-exchange market. South Korea’s KOSPI added about 2.7% on Tuesday and was on track for a roughly 65% jump in the second quarter, helped by continued enthusiasm for artificial-intelligence-related chipmakers. Australia’s S&P/ASX 200 was trading 0.2% lower.

US stocks rebound on bargain buying

US stocks rose on Monday, with the Nasdaq 100 climbing 2.3% to 29,774.75 as investors bought into the recent technology-led pullback, while the S&P 500 gained 1.2% to 7440.43 and the Dow Jones Industrial Average added 0.6% to 52,182.74, moving back towards its record high from Thursday. Telecom shares outperformed after Comcast said it would separate NBCUniversal and Sky from its cable and internet operations, boosting hopes for further dealmaking and helping Comcast close up 4.4%, while Charter Communications and Liberty Broadband each advanced by more than 9%. Satellite-related stocks also rallied after Rocket Lab agreed to buy Iridium Communications for USD 54 per share, lifting Iridium 25.4%, ViaSat by almost 24% and Rocket Lab by nearly 16%. Verizon, however, fell 5.2% after warning of a second-quarter loss of USD 700 million to USD 800 million linked to its new venture with BT, while Alphabet rose 4.8% after replacing Verizon in the Dow.

EU sentiment improves in June

Economic sentiment in the EU and the euro area strengthened in June, the European Commission said on Monday, with the Economic Sentiment Indicator (ESI) rising to 95.1 in the EU from 93.8 in May and to 95.0 in the euro area from 93.7, although both remained below the long-term average of 100. Higher confidence in retail trade, industry, services and among consumers drove the ESI increase, while construction weakened and the strongest gains among the biggest EU economies came from the Netherlands, Germany and Italy. European stock indices were mixed on Monday. The Euro Stoxx 50 closed 0.2% higher, while Germany’s DAX and France’s CAC 40 slipped 0.2% and 0.2%, respectively. Switzerland’s Swiss Market Index outperformed the region, rising 0.4%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Nike.

Economic data in focus: UK gross domestic product (08:00), German retail sales (08:00), French Consumer Price Index (08:45), Swiss KOF Economic Barometer (09:00), Swiss foreign currency reserves (09:00), German unemployment rate (09:55), Italian Consumer Price Index (11:00), German Consumer Price Index (14:00), Canadian gross domestic product (14:30), US JOLTS jobs report (16:00), Conference Board Consumer Confidence Index (16:00).

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