Asian stocks rise after Wall Street posts gains
Joe McDonald, The Associated Press
Published Thursday, August 31, 2017 12:11AM EDT
BEIJING – Asian stock markets were mixed Thursday after Wall Street rose on a stronger estimate of U.S. economic growth and Chinese factory activity improved.
KEEPING SCORE: The Shanghai Composite Index lost 0.4 per cent to 3,350.44 while Tokyo’s Nikkei 225 gained 0.7 per cent to 19,652. Hong Kong’s Hang Seng shed 0.4 per cent to 27,978.42 and Sydney’s S&P-ASX 200 advanced 0.5 per cent to 5,700.10. Seoul’s Kospi lost 0.3 per cent to 2,365.22 and Manila also fell while New Zealand, Taiwan and other Southeast Asian benchmarks rose.
WALL STREET: U.S. stocks climbed as investors cheered a report of stronger economic growth. Investor concerns about tensions between the U.S. and North Korea appeared to ease and stocks moved higher as the day progressed. Along with technology companies and consumer-focused firms, health care companies and banks finished higher. The Standard & Poor’s 500 index climbed 0.5 per cent to 2,457.59. The Dow Jones industrial average picked up 0.1 per cent to 21,892.43. The Nasdaq composite gained 1.1 per cent, to 6,368.31 as technology companies rose for the third day in a row.
U.S. UPGRADE: The Commerce Department raised its estimate for second-quarter economic growth to 3 per cent from 2.6 per cent – the fastest pace in two years. The estimate is much better than the first quarter, when growth was 1.2 per cent. Meanwhile, private businesses added 237,000 jobs in August with broad gains across several industries including construction, manufacturing and leisure and hospitality, according to a survey by payroll processor ADP.
ANALYST’S TAKE: “Market sentiment was given a lift by an upward revision to 2Q17 US GDP growth driven by consumer spending,” said Rob Carnell of ING in a report. He also pointed to a rise in August employment numbers from payroll processor ADP and an upward revision to July data. “Although economic data are positive for markets, politics, both domestic and international, continues to cast an ugly cloud,” said Carnell. He cited the Trump administration’s threat to shut government and its stance toward North Korea. “But with a wall of money looking for somewhere to park, the economic news is likely to trump geopolitics for the moment unless the situation worsens.”
CHINA MANUFACTURING: An official gauge of Chinese factory activity improved for a 13th straight month in August. The preliminary version of the purchasing managers’ index from the China Federation of Logistics & Purchasing and the National Bureau of Statistics rose to 51.7 from July’s 51.4 on a 100-point scale on which numbers above 50 show activity expanding. An index of new orders rose to 53.1 from July’s 52.8.
HARVEY’S IMPACT: Gasoline prices spiked to two-year highs and oil prices fell as the damage on the U.S. Gulf Coast became more apparent after Hurricane Harvey. The storm knocked out significant oil drilling and refining capacity, and on Tuesday, the largest U.S. oil refinery shut down and the operator of a major pipeline carrying fuel to the East Coast said it was running at a reduced rate. A record amount of rain left extensive flooding in Houston, the fourth-largest U.S. city, and the storm’s slow movement to the north and east was raising flood risks elsewhere in Texas and in other states.
ENERGY: Benchmark U.S. crude shed 4 cents to $45.92 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 48 cents on Wednesday to close at $45.96. Brent crude, used to price international oils, lost 1 cent to $50.72 in London. It plunged 93 cents the previous session to $51.73.
CURRENCY: The dollar gained to 110.53 yen from Wednesday’s 110.24 yen. The euro edged up to $1.1876 from $1.1885.