Asian Shares Rise On Growth Optimism

Asian stocks advanced on Monday, with upbeat economic data from the United States and Europe and progress on a U.S. infrastructure spending bill boosting sentiment. The latest batch of manufacturing reports from the region proved to be a mixed bag.

Chinese shares posted strong gains as authorities moved to soothe fears over a crackdown on tech companies and a top decision-making body of the ruling Communist Party said China will maintain stable macro policies in the second half of the year to ensure growth.

China’s Shanghai Composite index climbed 66.93 points, or 1.97 percent, to 3,464.29, while Hong Kong’s Hang Seng index ended up 274.77 points, or 1.06 percent, at 26,235.80.

The gains came even as data showed China’s factory activity expanded at a slower pace in July, adding to concerns of a slowdown in the world’s second-biggest economy.

The official Purchasing Managers’ Index fell to 50.4 in July from 50.9 in June, while the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) dropped to 50.3 last month from 51.3 in June, marking the lowest level in 15 months.

Japanese shares rallied as focus shifted to corporate earnings from big companies due this week. The Nikkei average jumped 497.43 points, or 1.82 percent, to 27,781.02, while the broader Topix index settled 2.05 percent higher at 1,940.05.

Toyota, Sony, Nintendo and Toyota Motor rose between 1.5 percent and 2.3 percent ahead of their earnings reports due this week. Mitsubishi Heavy Industries gained 0.6 percent after saying it returned to profitability in the April-June fiscal first quarter.

The manufacturing sector in Japan expanded at a faster pace in July, the latest survey from Jibun Bank showed today with a manufacturing PMI score of 53.0, up from 52.4 in June.

Australian markets hit a record high, led by tech stocks. The benchmark S&P/ASX 200 index inched up 98.80 points, or 1.34 percent, to settle at 7,491.40 while the broader All Ordinaries index ended up 96.30 points, or 1.26 percent, at 7,760.50.

Afterpay jumped nearly 19 percent as U.S.-based Square Inc agreed to buy the buy now, pay later firm for $29 billion in an all-stock deal. Zip Co shares surged 9 percent and Sezzle rallied 3.7 percent.

Energy firm Oil Search soared 4.7 percent after it agreed to an improved all-share offer from Santos. The big four banks all rose around 2 percent while miners Fortescue Metals Group and Mineral Resources lost 2 percent and 4.4 percent, respectively on weak metal prices.

In economic news, the manufacturing sector in Australia continued to expand in July, albeit at a slower pace, the latest surveys from Markit Economics and the Australian Industry Group showed.

Seoul stocks rebounded as strong economic data fueled optimism for a quick economic rebound from the pandemic. The benchmark Kospi gained 20.72 points, or 0.65 percent, to close at 3,223.04 after data showed South Korea’s July exports jumped 29.6 percent year-on-year to a record high amid high demand for chips and biohealth products.

Investors shrugged off survey results from Markit Economics showing that the manufacturing sector in the country expanded at a slower pace in July.

Market heavyweight Samsung Electronics gained 1 percent, leading chemical firm LG Chem advanced 2.6 percent and No. 2 chipmaker SK Hynix added 3.1 percent.

New Zealand shares ended notably higher despite declines on Wall Street Friday and the release of weak Chinese data. The benchmark NX-50 index rose 108.45 points, or 0.86 percent, to close at 12,702.97.

Power generator and retailer Genesis Energy fell 1.6 percent after an unfavorable arbitration decision in a dispute with Australian gas supplier Beach Energy.

U.S. stocks fell on Friday, with concerns over China’s clampdown on technology businesses, disappointing results from Amazon and renewed worries about a rise of cases of the Delta variant coronavirus weighing on markets.

The Dow dropped 0.4 percent, the tech-heavy Nasdaq Composite shed 0.7 percent and the S&P 500 eased half a percent.