Asia report: Stocks jump on slew of local data

Asian stock markets rallied today, with broad gains seen across the Asia-Pacific region. Encouraging economic data and positive corporate news helped drive investor sentiment.

“Asian equity markets started the new trading month on a positive note, drawing momentum from a rally on Wall Street,” said Patrick Munnelly at TickMill.

“Market participants also digested key data releases, including an improved Tankan survey in Japan and better-than-expected Chinese Caixin manufacturing PMI.

“The Nikkei 225 index rose by 1.7%, driven by the Bank of Japan's quarterly Tankan survey, which showed improved sentiment among large Japanese manufacturers for the first time in seven quarters.”

Munnelly added that the Hang Seng index and Shanghai Composite followed suit, supported by the positive Chinese Caixin manufacturing PMI and People's Bank of China's commitment to providing inclusive loan support for small and micro businesses.

“In other news, the US confirmed that Treasury Secretary Janet Yellen will visit China for meetings with senior officials, although expectations of a significant breakthrough are low.”

Asia-Pacific markets surge; China National Software leads

Japanese markets were a bright spot, with the Nikkei 225 up 1.7% to close at 33,753.33 points, and the Topix Index seeing gains of 1.41% to end at 2,320.81.

Daikin Industries was among the top performers, climbing 6.75%. Advantest Corporation and Z Holdings followed closely, with increases of 5.93% and 5.25% respectively.

Chinese markets also experienced positive movement, as the Shanghai Composite rose by 1.31% to close at 3,243.98, while the Shenzhen Component edged up by 0.59% to 11,091.56.

The standout in Shanghai was China National Software which soared by 10%, followed by Beijing Vastdata Tech at 9.98%.

Hong Kong's Hang Seng Index enjoyed a significant boost, ending the day 2.06% higher at 19,306.59.

Among the leaders were Geely Automobile, up 6.28%, Orient Overseas with a gain of 5.71% and Zhongsheng, which added 5.68%.

South Korea's Kospi gained 1.49% to close at 2,602.47. Samsung SDI and SD Biosensor led the day's winners, with rises of 7.17% and 7.03% respectively.

Australia's S&P/ASX 200 closed with moderate gains of 0.59% at 7,246.10.

Mining firms Sayona Mining and Core Lithium were the best performers, increasing 5.71% and 5% respectively.

In New Zealand, the S&P/NZX 50 made only a fractional gain of 0.003% to close at 11,916.87.

Ebos Group and Manawa Energy were the top risers, up 2.04% and 1.62% respectively.

In the foreign exchange market, the Japanese yen depreciated slightly against the US dollar, and was last off 0.19% at JPY 144.59.

The Australian dollar also weakened, and was off 0.15% at AUD 1.5028, while the New Zealand dollar strengthened 0.32% on the greenback to change hands at NZD 1.6274.

Oil prices edged higher too, with Brent crude futures last up 0.88% on ICE at $76.07 a barrel, while the NYMEX quote for West Texas Intermediate matched that increase to $71.26 a barrel.

China, South Korea factory activity slows; Japan's business sentiment improves

In economic news, factory activity in China showed signs of deceleration in June, based on the latest private survey conducted by Caixin/S&P Global.

The manufacturing purchasing managers' index (PMI) for China dipped to 50.5 in June, a drop from May's reading of 50.9.

However, the figure surpassed the 50.2 economists had predicted, according to Reuters.

The news follows an earlier report from the China National Bureau of Statistics, revealing that the official manufacturing PMI fell to 49.0 in June, a minor decline from May's 48.8.

“Global demand is likely to deteriorate in the second half, as the US is likely to enter a recession, while the eurozone is already weak,” said Duncan Wrigley at Pantheon Macroeconomics.

“China is likely to add fiscal, quasi-fiscal and targeted monetary measures to the recent broad 10 basis point lending rate cuts.

“But the scale of stimulus should still be limited as the goal will be for GDP growth to get back on track for a relatively conservative ‘about 5%’ target.”

Further east, South Korea's manufacturing sector seemed to struggle as it remained in the contraction zone for the twelfth consecutive month.

Data from an S&P Global private survey showed the nation's manufacturing PMI slipping to 47.8 in June, down from 48.4 in the previous month.

The country last experienced an expansion in its factory activity in June 2022, posting a PMI of 51.3.

Finally, Japan witnessed an uplift in business sentiment in the second quarter, as reported by the Bank of Japan's quarterly Tankan survey.

The headline index, which gauges the mood among large manufacturers, hit +5 in June.

That was a marked improvement from the first quarter's +1 and exceeded Reuters-polled economists' forecast of +3.

The sentiment index for sizable non-manufacturing businesses also showed an uptick, reaching +23 in June from +22 in March, registering its highest level since June 2019.

Reporting by Josh White for Sharecast.com.