Hong Kong: Investors piled into risk assets on optimism that the US administration will embark on a large-scale stimulus programme and after data from China showed sustained economic recovery and job creation.
The risk-on trade put the dollar on the defensive with the currency falling 0.3% against a basket of currencies to 93.36, boosting the demand for gold which rose 1% to $1,913 per ounce.
Drew Hammill, spokeswoman for US House Speaker Nancy Pelosi, said discussions were held for a comprehensive stimulus package.
Meanwhile, data from China’s services industry showed expansion for the fifth straight month and job creation for the second month in a row, implying a sustained recovery.
“More jobs have been created in the service sector as a result enabling more people to spend,” said Iris Pang ING’s chief economist for Greater China, referring to China’s President Xi Jinping’s “internal circulation” strategy for quickly delivering a recovery in Chinese GDP growth.
“It is the lower-income classes that power the massive consumer market. If they are employed, China’s consumption should increase. So far, internal circulation has been successful as retail sales in August have returned to positive growth.”
China’s CSI 300 benchmark jumped 2.04% as investors returned from a week-long holiday, and Australia’s ASX 200 ended flat.
But Japan’s Nikkei 225 dipped 0.12% after data showed household spending fell in August and real wages slipped for the sixth month in a row, although expectations of a third extra budget soothed investors.
And Hong Kong’s Hang Seng index fell 0.31% as new restrictions are expected to battle a recent spike in local coronavirus cases.
Also on Asia Times Financial:
Foreign Exchange: Chinese yuan powers to over two-year highs
· Japan’s Nikkei 225 index dipped 0.12%
· Australia’s S&P ASX 200 ended flat
· Hong Kong’s Hang Seng index dipped 0.31%
· China’s CSI300 leapt 2.04%
· The MSCI Asia Pacific index added 0.27%.
Stock of the day
Carmaker BYD Company Ltd fell as much as 5.5% after it said car sales in September fell 20% on year with new energy vehicle sales falling as much as 40%.
This report appeared initially on Asia Times Financial.