Asian shares higher, but China down after tough talk from Xi

Tokyo, Shares were mostly higher in Asia on Friday, though markets in Shanghai and Hong Kong declined a day after the Chinese Communist Party marked its centenary with tough talk by Chinese President Xi Jinping.

On Wall Street on Thursday, the benchmark S&P 500 touched a new record in anticipation of a positive U.S. jobs report, expected later Friday. Recent data have provided encouraging signs of a steady recovery from the pandemic, said AP.

Japan’s benchmark Nikkei 225 added 0.2% to 28,375.93. South Korea’s Kospi picked up nearly 0.2% to 3,283.93. Australia’s S&P/ASX 200 gained 0.4% to 7,300.30. Shares also rose in India, Taiwan and Southeast Asia.

But Hong Kong’s Hang Seng slipped 1.6% to 28,367.91, while the Shanghai Composite lost 1.6% to 3,532.23.

Fitch Solutions forecast in a report that Japan’s economy will start to recover as growing numbers of people are vaccinated for COVID-19.

Japan’s vaccine rollout pace is about the same as the rest of Asia’s, with about 10% of the population fully vaccinated. That lags the U.S. and much of Europe.

The S&P 500 index rose 0.5% on Thursday to 4,319.94, marking its sixth straight gain and fourth consecutive record high. The Dow Jones Industrial Average gained 0.4% to 34,633.53. The technology-heavy Nasdaq Composite added 0.1% to 14,522.38.

Small company stocks fared better than the rest of the market. The Russell 2000 index of smaller companies rose 0.8%, to 2,329.34.

Investors have been encouraged by data that show the economy continues its recovery from the pandemic. The latest weekly unemployment report showed the lowest number of claims for jobless aid since the pandemic walloped the economy.

The highly anticipated jobs report for June comes out Friday. “Investors are eager to see whether or not the labor market continues to recover as quickly as expected,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Employment has been one of the shakier areas of the economic recovery, lagging other measures such as consumer confidence and retail sales. Economists and analysts have said that a much fuller and more stable recovery depends on more people going back to work.

Economists surveyed by FactSet expect the U.S. economy created 675,000 jobs last month, and the unemployment rate fell to 5.7%.

The June jobs report is also being closely watched as a potential gauge for when the Federal Reserve might start easing its bond purchases and other measures that have kept interest rates low. Inflation fears have somewhat subsided, but investors are still trying to figure out whether rising inflation will be temporary or more long-lasting.

Investors will look to see if wages kept rising, which could add to inflation. Oil prices jumped as OPEC met. The group of oil-producing countries is considering whether to increase production as the global economy recovers from the pandemic.

Prices of oil and other raw materials have risen steadily this year as demand has increased. Oil gained 2.4% Thursday and is up 55% so far this year.

Higher oil prices translated into higher energy company stocks. Occidental Petroleum rose 5.1%, ConocoPhillips gained 3.3% and Marathon Oil added 4%. The energy sector of the S&P 500 was the biggest winner in the first half of the year with a gain of over 40%.

Benchmark U.S. crude rose 9 cents to $75.32 a barrel. Brent crude, the international standard, rose 6 cents to $75.90 barrel.

In currency trading, the U.S. dollar rose to 111.59 Japanese yen from 111.51 yen late Thursday. The euro cost $1.1844, down from $1.1847.

Source: Bahrain News Agency