Asia stocks rise on vaccine hopes, eyes on US jobs report

MSCI's broadest index of Asia Pacific shares outside of Japan rose 0.9 per cent with all major indexes trading higher on hopes of a vaccine for Covid-19.
MSCI's broadest index of Asia Pacific shares outside of Japan rose 0.9 per cent with all major indexes trading higher on hopes of a vaccine for Covid-19.PHOTO: AFP

SYDNEY (REUTERS) - Asian stocks tracked Wall Street higher on Thursday (July 2) although sentiment was cautious ahead of US employment data while copper prices jumped to more than six-month highs on a better global outlook and supply fears in top producer Chile.

MSCI's broadest index of Asia Pacific shares outside of Japan rose 0.9 per cent with all major indexes trading higher on hopes of a vaccine for Covid-19, which has killed more than half a million people globally and shut down the world economy.

Japan's Nikkei rose 0.5 per cent, China's blue-chip index added 1.2 per cent while Hong Kong's Hang Seng index climbed 1.5 per cent.

Singapore's Straits Times Inedx was up 0.2 per cent at 11:52am local time.

E-mini futures for the S&P 500 were flat.

US employment figures due later in the day are expected to show if the world's largest economy can sustain its fragile recovery as new Covid-19 cases accelerate in several southern states.

Economists polled by Reuters expect private employers to show 2.9 new million new jobs June, which would follow a surprise increase in May. Casting some doubt over that projection, however, was a smaller-than-expected increase in jobs seen in the ADP report on Wednesday.

"A better-than-expected outcome could go some way to settling the near-term debate that the US labour market will heal relatively quickly and justify new highs in US equities," said Stephen Innes, strategist at AxiCorp.

Wall Street ended on Wednesday higher after key economic indicators showed a rebound in Chinese manufacturing activity as it recovers from the pandemic while sharp declines in European factory activity eased.

Risk sentiment was whetted by a Covid-19 vaccine from Pfizer and Germany's BioNTech, which was found to be well tolerated in early-stage human trials.

Equity investors shrugged off concerns about Hong Kong where police arrested more than 300 people protesting against sweeping new laws introduced by China to snuff out dissent.

 
 

Those developments have raised concerns about China's already strained relations with its major Western trading partners, particularly the United States.

The US House of Representatives passed legislation on Wednesday that would penalise banks doing business with Chinese officials who implement a national security law.

In commodities, the most-traded August copper contract on the Shanghai Futures Exchange touched 49,570 yuan a tonne, its highest since Dec 30, 2019.

Manufacturing activity rebounded in the United States in June, while the factory sector in Germany, Europe's largest economy, contracted at a slower pace and top copper consumer China posted better-than-expected manufacturing data.

Meanwhile in Chile, where the number of Covid-19 cases have been climbing, miner BHP said it would begin to slow production at its small Cerro Colorado copper mine in the country.

 
 

Elsewhere, oil prices eased and gold was a tad softer too while the dollar was steady in a sign of investor caution despite encouraging macro data.

Brent crude slipped 6 cents to US$41.97 a barrel. US crude was off 12 cents at US$39.70 a barrel. US gold futures was 0.12 per cent lower, at US$1,777.70.

The safe haven greenback was unchanged against the Japanese yen at 107.45. The euro barely moved too and was last at US$1.1254 while sterling was treading water at US$1.2477.

That left the dollar index at 97.139.