Asian shares remained mostly high on Wednesday, with another mood boost from Wall Street, but there remains apprehension over an increase in coronavirus cases in some parts of the world.
Japan’s benchmark Nikkei 225 closed up 0.1% at 22,576.63. Australia’s S&P / ASX 200 also rose 0.1% to 5,958.40. Cospi of South Korea added 1.5% to 2,162.46. Hong Kong’s Hang Seng slipped 0.1% to 24,854.72, while Shanghai Composite rose 0.2% to 2,976.39.
Analysts warn that despite recent market rallies, there is little confidence that the infection will not continue to spread, given the increasing numbers in the U.S., Brazil, and parts of Asia.
Hayuki Narita of Mizuo Bank said, “However, the reversal of specifics reduces recovery.”
ING senior economist Prakash Sapal said that COOID-19 is slowly returning to the epidemic, with optimism about exemptions from lockdown restrictions.
He said in a report, “The recent spurt in transitions has given rise to the concern that governments will be forced to shut down their economies.
On Wall Street, the S&P 500 grew 0.4% and is on pace for its third straight monthly profit. The Nasdaq Composite, which is heavy with technology shares, climbed higher for the second consecutive day. Bond yields rose, another sign of increased confidence in the economy.
Health care stocks and companies that rely on consumer spending were also among the larger beneficiaries, while safe-play sectors such as real estate and utility stocks fell.
Investors have been focused on the prospects of economic recovery, with more businesses reopening after the closure due to the coronavirus epidemic. Encouraging financial data, including retail sales and hiring, has helped Stoke optimism that the recession will be relatively short-lived.
Wall Street has expressed confidence that CFRA chief investment strategist Sam Stovall said the Federal Reserve and Congress are ready to provide historical support to the market and economy.
“All of the negative news is basically built into share prices,” Stovall said. “If we want to stumble, there is a possibility for the Fed and Congress to put a fiscal and monetary floor under the economy and markets. And now, with the possibility that the economy will not come to a complete halt, we should end up with a second wave, with the market basically calling it ‘forward and up’. ”
The S&P 500 gained 13.43 points to close at 3,131.29 points. The Dow Jones Industrial Average rose 131.14 points or 0.5% to 26,156.10. The Nasdaq climbed 74.89 points or 0.7% to close at 10,131.37. The index has fallen only twice so far in June. The Russell 2000 index of small-company stocks rose 5.81 points, or 0.4%, to 1,439.34.
The market continues to fluctuate, despite volatility, even as the increase in new coronavirus cases in the US and other countries increases the prospects for economic recovery.
The World Health Organization said over the weekend that the epidemic still existed. The U.S., which is seeing a rapid rise in cases in the South and West, according to a tally at Johns Hopkins University, has the highest number of infections and deaths in the world, with 2.3 million cases and more than 120,000 confirmed cases related to the virus has happened.
Its global count is more than 9.2 million worldwide, with more than 476,000 deaths.
On Tuesday, federal health officials asked Congress to handle the second wave of coronavirus infections in this year’s fall and winter.
While the virus is a concern as a business is resuming, new cases are yet to come up, said Jason Droh, head of the asset allocation for the US at UBS Global Wealth Management.
“Right now, there is something to monitor, but when you look at the underlying data, it is still at levels that are not unlike coming back in March and April,” he said.
Investors are placing more weight on economic data releases suggesting that the economy that has reopened is attempting to emerge from a deep recession. Further updates on the US economy are expected later this week when the government will release data on consumer spending, weekly unemployment assistance applications, and durable goods orders.
In Energy Trading, Benchmark U.S. Crude oil slipped 31 cents to $ 40.06 a barrel in electronic trading on the New York Mercant Exchange. It dropped 9 cents to $ 40.37 a barrel on Tuesday. Brent crude fell 22 cents to $ 42.51 internationally.
The dollar rose to 106.54 yen from 106.53 yen on Tuesday. The euro costs $ 1.1316 from $ 1.1307.