BANGKOK – Shares in Asia were mostly higher on Wednesday despite new data showing slowing factory activity this month as the virus outbreak disrupted shipping at some Chinese ports.
Markets rose in Shanghai, Sydney and Seoul but slipped in Tokyo and Hong Kong.
Japan, South Korea and China all released data that was “a bit disappointing,” OANDA’s Jeffrey Haley said in a commentary, adding that “it looks like a softening of demand from major export markets, which is driving the chip’s demand.” Due to shortage and logistic logjams, orders are muted in many areas.”
Japan’s industrial output fell 5.9% in June from a month earlier, while South Korean output fell 0.7%.
The Purchasing Managers’ Index, a key measure of sugar factory activity, remained only in expansion mode.
Some signs of weakness may reassure investors that central banks and governments may withdraw grand support for markets that have propelled them to record highs after a slowdown at the start of the pandemic.
Tokyo’s Nikkei 225 index ended 0.1% lower at 28,791.53. In Seoul, the Kospi rose 0.4% to 3,300.33 and the Shanghai Composite Index rose 0.3% to 3,584.06. Sydney’s S&P/ASX 200 rose 0.4% to 7,330.50.
The Hang Seng index in Hong Kong fell 0.4% to 28,879.87. Shares rose in India and Taiwan.
The biggest data release this week will be Friday’s US jobs report for June. Economists expect it to show that US employers created 675,000 more jobs than they cut, with the unemployment rate falling to 5.7%.
Job growth has slowed recently, with economists falling disappointingly short of expectations in recent months. This is important because the Fed is likely to maintain its support for the economy through lower interest rates as long as the job market looks like it needs help.
Markets were sluggish on Tuesday, pending Friday’s update.
The S&P 500 rose less than 0.1% to 4,291.80, adding to its all-time high the day before. More stocks fell than rose within the index, but gains made up for weakness in banks and utilities for tech companies.
The Dow Jones Industrial Average also rose less than 0.1% to 34,292.29. The Nasdaq Composite rose 0.2% to 14,528.33.
Stocks have set their recent record on optimism that the economy is consolidating and the Federal Reserve will keep interest rates low for some time.
A report released on Tuesday showed that confidence levels among US consumers are rising, beating economists’ expectations of a slight decline. This is important for an economy where consumers spend the most.
A separate report showed that home prices across the country rose again in April, continuing their uptrend.
One day left in June, the market is preparing to close strongly in the first half of the year. The S&P 500 is on track to gain 14.3%, more than double the full one-year average going back to the turn of the millennium.
Major banks announced plans to return billions of dollars to their shareholders through dividend increases and stock buybacks after passing the Federal Reserve’s most recent “stress test.”
The central bank has stuck to its position that high inflation is likely to be only temporary. This will allow it to keep interest rates lower for longer than it otherwise would.
Long-term bond yield levels have eased after jumping in the first half of the year due to inflation concerns. The yield on the 10-year Treasury was steady at 1.48%.
In other trade, US benchmark crude oil rose 30 cents to $73.28 a barrel in electronic trading on the New York Mercantile Exchange. It rose 7 cents to $72.98 a barrel on Tuesday. International benchmark Brent crude rose 15 cents to $74.43 a barrel.