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Thursday, August 5, 2021
Stocks & Shares

Wall Street rally lifts Asian shares

Wall Street

Nikkei 225 added 0.6% to 29,518.34. S&P/ASX 200 climbed 1.3% to 7,172.80, and Kospi gained 1.7% to 3,252.01

Asian shares mostly rose Monday, cheered by a rally on Wall Street as a grim jobs report signalled to investors that interest rates will likely stay low.

Japan’s Nikkei 225 added 0.6% in afternoon trading to 29,518.34. Australia’s S&P/ASX 200 climbed 1.3% to 7,172.80. South Korea’s Kospi gained 1.7% to 3,252.01. Hong Kong’s Hang Seng inched down 0.3% to 28,527.52, while the Shanghai Composite dropped nearly 0.1% to 3,416.19.

The regional gains are coming despite a recent surge in Covid cases in Asia.

In Asia, incoming economic releases may contain the long shadow of renewed resurgence of COVID, said Venkateswaran Lavanya, of the Asia & Oceania Treasury Department in Mizuho Bank’s Singapore branch.

Yeap Jun Rong, market strategist for IG in Singapore, said investors are watching for inflation and retail sales data out of the U.S. and for British economic growth data.

The S&P 500 index gained 0.7% to 4,232.60, its third straight gain, and topping the previous all-time high set last month. The Dow Jones Industrial Average added 0.7% to 34,777.76, setting a record high for the third straight day. The Nasdaq composite rose 0.9%, to 13,752.24.

Small company stocks also got a solid boost. The Russell 2000 index outperformed the major stock indexes, jumping 1.4% to 2,271.63.

The economy is regaining momentum as the rate of coronavirus vaccinations rises but Friday’s U.S. jobs report was a massive disappointment. The market’s most anticipated economic data of each month, it showed employers added just 266,000 jobs in April. That was far fewer than the 975,000 jobs that economists expected and a steep slowdown from March’s hiring pace of 770,000.

The weak jobs number bolsters the case for the Federal Reserve to keep interest rates low.

Such low interest rates have been a huge reason for the stock market’s recovery from its pandemic low in March 2020. Investors have fretted that a supercharged economy could lead to higher, persistent inflation, forcing the U.S. central bank to raise rates. The Fed has been holding short-term rates at a record low and buying $120 billion in bonds every month.

Recent relatively strong global earnings reports have lifted share prices. Among companies reporting earnings later this week are Japanese automakers Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

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