Asian stocks rise as survey shows Chinese services reviving
Major Asian stock markets advanced Monday after Wall Street declined and a survey showed the downturn in Chinese service activity eased in May as anti-virus controls on Shanghai and other major cities were lifted.
Benchmarks in Shanghai, Tokyo and Hong Kong rose.
On Wall Street, the benchmark S&P; 500 index lost 1.6% on Friday amid concern about higher interest rates and a possible economic downturn and job losses.
A survey showed activity in Chinese retailing and other service industries shrank in May but at a slower rate than the previous month. The ruling Communist Party is allowing stores, factories and other businesses in Shanghai to reopen after a two-month shutdown to fight virus outbreaks. Restrictions in the capital, Beijing, are easing.
“Some pockets of optimism may come from further easing of virus restrictions in Beijing,” said Yeap Jun Rong of IG in a report.
The Shanghai Composite Index rose 1.2% to 3,233.73 after the business news magazine Caixin said its monthly purchasing managers’ index for services rose to 41.4 from April’s 36.2 on a 100-point scale on which numbers below 50 show activity contracting.
The Hang Seng in Hong Kong gained 1.4% to 21,379.67 and the Nikkei 225 in Tokyo added 0.7% to 27,956.19. Korean markets were closed for a holiday.
Sydney’s S&P-ASX; 200 shed 0.3% to 7,215.90 while New Zealand markets were closed for a holiday.
India’s Sensex opened down 0.6% at 55,559.30. Southeast Asian markets declined.
On Wall Street, the S&P; 500 declined to 4,108.54 for its eighth weekly loss in the past nine weeks.
The Dow Jones Industrial Average fell 1% to 32,899.70. The Nasdaq fell 2.5% to 12,012.73.
Government data showed U.S. employers added 390,000 jobs in May, beating expectations of 322,500.
Investors are uneasy about the possibility Federal Reserve interest rates aimed at cooling inflation that is running at a four-decade high might tip the U.S. economy into a recession.
The same government report showed wages were slightly lower than forecast in May, which might reduce future pressure for prices to rise. That would reduce pressure on the Fed for more rate hikes.
More than four out of five stocks in the S&P; 500 fell. The biggest declines were in tech stocks.
Tesla tumbled 9.2% after U.S. safety regulators said more than 750 owners have complained about cars suddenly stopping on roadways for no apparent reason while operating on their partially automated driving systems.
Benchmark U.S. crude rose 70 cents to $119.57 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $2 on Friday to $118.87. Brent crude, the price basis for international oil trading, advanced 72 to $120.44 per barrel in London. It closed $2.11 higher the previous session at $119.72.
The dollar declined to 130.72 yen from Friday’s 130.85 yen. The euro edged up to $1.0724 from $1.0720.