Asia report: Markets finish higher as China services sector rebounds

Markets in Asia closed in the green on Friday, as investors digested some positive services data out of China, as well as a better-than-expected jobs report out of the US overnight.

In Japan, the Nikkei 225 was up 0.72% at 22,306.48, as the yen eked out gains of 0.01% on the dollar to last trade at JPY 107.49.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.63%, fashion firm Fast Retailing added 0.38%, and technology conglomerate SoftBank Group rocketed 2.63%.

The broader Topix index was 0.62% firmer by the end of trading in Tokyo, closing at 1,552.33.

On the mainland, the Shanghai Composite was ahead 2.01% at 3,152.81, and the smaller, technology-heavy Shenzhen Composite was ahead 1.28% at 2,041.89.

The unofficial Caixin/Markit services purchasing managers’ index came in at 58.4 for June, making for the highest level since early 2010, and rising from the 55.0 reading for May.

It was above the 50-point level that separates expansion from contraction, and marked the fastest pace of expansion for China’s services sector for more than a decade.

“The rebound from the lockdown is extremely impressive but the reaction in markets in Asia and Europe have been muted,” said CMC Markets analyst David Madden.

South Korea’s Kospi rose 0.8% to settle at 2,152.41, while the Hang Seng Index in Hong Kong added 0.99% to 25,373.12.

The blue-chip technology stocks were both higher, with Samsung Electronics up 1.32%, and chipmaker SK Hynix rising 1.18%.

SK Biopharmaceuticals thundered ahead 29.92% for a second day of solid gains, following its initial public offering on Thursday.

Investors spent the early parts of the session poring through the latest non-farm payrolls report out of the United States, with the number of payrolls surging by 4.8 million in June - well ahead of the 2.9 million expected by economists surveyed by Dow Jones.

The country’s unemployment rate also fell back to 11.1%, which was better than the 12.4% anticipated in the same survey.

Initial jobless claims, however, rose by 1.427 million in the week ending 27 June, which was more than the 1.38 million economists had pencilled in.

“Now that the dust has settled in regards to the 4.8 million jobs that were added in the US last month, dealers might reflect on the fact that the continuing claims reading actually ticked up from 19.23 million to 19.29 million,” noted David Madden.

“[This] is probably as a result of certain states reversing the easing of their lockdowns.

“The infection rate in the US and the pausing of the reopening of states is still a factor for traders to consider.”

Oil prices were lower as the region entered the weekend, with Brent crude last down 1.62% at $42.44 per barrel, and West Texas Intermediate falling 1.72% at $39.95.

In Australia, the S&P/ASX 200 managed gains of 0.42% to 6,057.90, while across the Tasman Sea, New Zealand’s S&P/NZX 50 managed gains of 0.49% to 11,558.70.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.13% at AUD 1.4424, as the Kiwi advanced 0.16% to NZD 1.5335.