(Reuters) – SYDNEY, June 28 (Reuters) – On Monday, Asian stocks were cautious, with Chinese markets staying steady, as a jump in coronavirus infections across the region over the weekend dampened investor optimism, while oil remained at 2-1/2-year highs. MSCI’s broadest index of Asia-Pacific stocks outside Japan was down a smidgeon at 702.57 at the time of writing. The Australian stock market (.AXJO) fell 0.2 percent. The benchmark KOSPI (.KS11) in South Korea and the Nikkei in Japan both scarcely changed (.N225). Investors were concerned about an increase in coronavirus infections in Asia, with Sydney, Australia’s most populous city, going into lockdown after a cluster of cases involving the highly dangerous Delta strain grew. In Indonesia, the number of cases is at an all-time high, and Malaysia’s lockdown is due to be prolonged. Bangkok and other regions in Thailand have also imposed additional limitations. The CSI300 index (.CSI300) was up 0.2 percent, indicating that Chinese stocks were slightly higher. Profit growth for China’s industrial enterprises fell again in May, according to data released over the weekend, as rising raw material prices pinched margins and dragged on factory activity. Investors will be watching China’s official factory activity, which is coming on Wednesday. The manufacturing index is predicted to drop from 51 to 50.7. Later this week, the Caixin Manufacturing PMI for the private sector will be released. Global stock markets hit new highs last week, bolstered by news of a bipartisan US infrastructure pact and weaker-than-expected US inflation. Over the next eight years, the infrastructure plan will cost $1.2 trillion, with $579 billion in new spending. “Investors are keeping a close eye on President Biden’s bipartisan infrastructure proposal as it moves through Congress. Investment in renewables and EV infrastructure may significantly enhance demand, according to the package “In a note, ANZ analysts wrote. In early Asian trading, oil prices soared to their highest level since October 2018 on anticipation that demand will surpass supply and OPEC+ will be cautious in releasing more crude to the market from August. Brent crude futures were up 12 cents to $76.30 a barrel, while U.S. crude was up 13 cents to $74.18 a barrel. After statistics indicated a gauge of underlying inflation climbed less than expected in May, alleviating fears of a quick withdrawal in stimulus by the Federal Reserve, the S&P 500 (.SPX) jumped 2.7 percent for the week, its largest weekly rise since early February. After staying near the previous session’s record high, the Dow (.DJI) rose 0.7 percent, while the tech-heavy Nasdaq (.IXIC) fell 0.06 percent. A carefully awaited U.S. jobs data for June will be released later this week, which could signal to solid labor demand. To cap off a week in which rates rose to their highest levels since March, yields on benchmark 10-year U.S. Treasuries soared back above 1.50 percent. Despite regional differences in recovery, global monetary and fiscal support in response to the COVID-19 epidemic is strengthening financial assets. President of the Boston Federal Reserve Bank Eric Rosengren warned on Friday that a build-up of financial stability risks connected to low interest rates might lead to another slump, interrupting the labor market recovery and obstructing a return to full employment. The US dollar was marginally higher against a basket of other currencies, trading at 91.846. The Japanese yen fell to 110.65 per dollar, while the euro fell to $1.1925. Gold prices fell 0.4 percent to $1,771.9 an ounce, owing to the strengthening of the dollar. Shri Navaratnam edited the piece. The Thomson Reuters Trust Principles are our standards. Continue reading
