TOKYO (AP) — Asian shares were mixed on Wednesday after another U.S. rally spurred by positive economic data, even while the coronavirus pandemic has regions around the world battling recessions.
Benchmarks rose in Tokyo and Sydney but fell in Hong Kong and Shanghai.
Australia reported its worst drop in GDP ever, with a 7% contraction in the April-June quarter. That resulted in the country’s first recession in 30 years.
However, regional market sentiment was boosted by some better-than-expected data on the U.S. economy.
Japan’s benchmark Nikkei 225 edged up 0.3% in morning trading to 23,204.94. Australia’s S&P/ASX 200 rose 1.5% to 6,043.20. South Korea’s Kospi was flat, at 2,350.10. Hong Kong’s Hang Seng slipped 0.5% to 25,059.92, while the Shanghai Composite shed 0.5% to 3,393.58.
Regional market sentiment was lifted by better-than-expected economic data overnight. The U.S. Commerce Department said construction spending in the U.S. edged higher in July, breaking a string of losses due to disruptions caused by the pandemic.
“A positive tone had been assumed by Asia markets, finding inspiration from Wall Street with the gains notched overnight,” said Jingyi Pan, market strategist at IG in Singapore.
“Although the U.S. economy is nowhere near the state before the COVID-19 hit yet, these evidences of continued recovery nevertheless works in the favor of keeping the cautious optimism and the equity rally going,” she said in a commentary.
The Institute for Supply Management said its latest manufacturing index increased last month, reflecting a faster pace of expansion by American factories.
Investors will be looking for more clues on the state of the economic recovery this week, including the monthly U.S. jobs report on Friday.
Wall Street kicked off September with another set of milestones Tuesday, as an afternoon rally carried the S&P 500 and Nasdaq composite to all-time highs.
The S&P 500 jumped 0.8% to 3,526.65. The index set several new highs last month. The Dow Jones Industrial Average recovered from early losses, climbing 0.8% to 28,645.66.
The Nasdaq composite rose 1.4%, to 11,939.67. The Russell 2000 index of smaller company stocks also bounced back from an sluggish start, adding 16.71 points, or 1.1%, to 1,578.58.
Encouraging data as broad swaths of the economy have reopened this summer have helped stoke investor optimism about a recovery.
Traders have been favoring technology stocks as the pandemic has dragged on, forcing millions of people to rely more than ever on internet-connected devices and online services for work, home schooling and communication.
Apple climbed 4% Tuesday. It’s up more than 82% this year. Zoom Video Communications soared 40.8%, a day after the now-ubiquitous video conferencing service reported another quarter of explosive growth.
Benchmark U.S. crude added 36 cents to $43.12 a barrel. It rose 15 cents to $42.76 a barrel on Tuesday. Brent crude, the international standard, gained 38 cents to $45.96 a barrel.
The U.S. dollar inched up to 106.07 Japanese yen from 105.97 yen. The euro cost $1.1903, down from $1.1913.
AP Business Writer Alex Veiga contributed. Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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