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STOCK MARKET - SYDNEY. Chinese stocks drove Asian markets higher on Monday, though sentiment was still cautious ahead of a U.S. Presidential debate and as a spike in new coronavirus cases undermined global economic recovery hopes.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.5% to 550.47, but still within striking distance of a two-month low of 543.66 hit last week.
The index is set to end the month deep in the red after three straight monthly gains as the pandemic continues to wreak economic havoc around the world and raises investor anxiety about sky-high valuations.
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Chinese shares opened higher and helped to underpin Asian markets after a tentative start, with the blue-chip CSI 300 index up 0.85%. Shanghai’s SSE climbed 0.5%.
Encouragingly, data over the weekend showed profits at China’s industrial firms grew for the fourth straight month in August buoyed in part by a rebound in commodities prices and equipment manufacturing.
Elsewhere, Japan’s Nikkei was 0.75% higher, partly on a lower yen, while South Korea’s KOSPI index gained 1.1%.
Australia’s main share index reversed early losses to edge up, led by positive news on the coronavirus front with new infections in the country’s second-most populous state of Victoria down sharply and allowing authorities to ease some of the mobility restrictions.
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The broad gains in Asia follow a Wall Street rally on Friday though analysts expect the gains to be short-lived as expectations for economic growth start to falter.
Particularly worrying is a resurgence of COVID-19 cases in Europe, dousing earlier hopes that authorities might have started to exert some control on the outbreak and raising further strains on businesses already grappling with losses.
“Clouds have started to gather over the developed world as political uncertainty increases in the U.S. and Europe grapples with a resurgence in COVID-19 cases,” Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management.
