Asia Markets wrap

Hong Kong: Asian markets are subdued this morning as investor focus has shifted back to economic data and corporate earnings as the initial euphoria around a vaccine delivery faded.

Overnight, Wall Street was boosted after the US government and Moderna Inc agreed that the biotechnology company would supply 100 million doses of its potential coronavirus vaccine.

This morning data released showed Australian employment growth in July surpassed expectations, but the road ahead was challenging analysts said.

The consensus view for July employment growth was around 30,000, but the actual increase was 114,700.

“The likelihood is that job gains will be much harder to generate in the coming months – June and July can be viewed as the easy gains following re-opening,” Robert Carnell, ING Bank’s regional head of research in the Asia-Pacific said. “But the economy is still operating far from ‘business as usual’, and further gains in the months ahead, coupled with tighter income support will continue to weigh on household finances and spending.”

Australia’s S&P/ASX 200 benchmark was 0.8% lower also after poor earnings from Telstra, AMP and AGL dragged down the index.

Elsewhere, corporate earnings are driving markets and investor sentiment.

Strong results

Overnight, after markets closed Tencent and China Unicom published street beating results.

Gaming giant Tencent reported revenue growth of 28% and profit rise of 29% in the six months ended June, with margins ticking up.

“Tencent reported 2Q results with revenue and earnings ahead of expectations. The limited revenue impact seen coming from the US was highlighted,” Jefferies & Co analysts said in a note.

“Strong smartphone games revenue was driven by its portfolio strategy and innovative features, instead of relying on single titles. Digitisation of merchants migrates them from offline to online under its social ecosystem backed by private domain traffic.”

China Unicom, the country’s second-biggest mobile phone operator, also reported better results and an improved outlook. “The huge demand for intelligent and digital transformation in various industries will bring enormous potential for corporate development,” the chairman and CEO of China Unicom Wang Xiaochu said.

Tencent, which has the highest weighting in the Hang Seng benchmark along with AIA and HSBC, rose as much as 2% before surrendering gains. China Unicom which has a much lower weightage in the index soared more than 20%.

Nikkei up

Japan’s Nikkei index jumped 1.9% after BOJ released data that showed PPI (producer purchasing index) data was up 0.6% in July, beating expectations of 0.3% rise and matching the previous month’s increase.

But China’s CSI 300 index dipped 0.28% and Hong Kong’s Hang Seng index was marginally lower, edging down 0.2% as investors awaited earnings announcements and caution prevailed ahead of a Sino-US video conference on August 15 to talk about bilateral issues and the phase-1 trade deal signed in January.

Overnight, the US government signed a coronavirus vaccine supply deal with pharmaceuticals company Moderna for 100 million doses.

Moderna said the deal was for $1.2 billion and that propelled the stock over 10%.

The Dow Jones Industrial Average rose 1.05%, the S&P 500 gained 1.4% to within a sliver of its all-time closing high, while the Nasdaq Composite jumped 2.13%.

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This report appeared first on Asia Times Financial.

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