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Chinese Shares Bolster Asian Markets Amid Rising Virus Fears

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Chinese stocks drove Asian markets higher on Monday, though sentiment was still cautious in front of a U.S. Presidential debate and as a spike in new coronavirus cases undermined global recovery that is economic.

MSCI’s index that is broadest of Asia-Pacific shares outside Japan advanced 0.5per cent to 550.47, yet still within striking distance of a two-month low of 543.66 hit last week. Chinese stocks drove Asian markets higher on Monday.

The index is set to end the month deep in the red after three straight monthly gains as the pandemic continues to wreak havoc that is economic the world and raises investor anxiety about sky-high valuations.

Chinese shares opened higher and helped to underpin Asian markets after a start that is tentative with all the blue-chip CSI 300 index up 0.85%. Shanghai’s SSE (LON:SSE) climbed 0.5%.

Encouragingly, data within the weekend showed profits at China’s industrial firms grew for the fourth month that is straight August buoyed in component by a rebound in commodities prices and equipment manufacturing.

Elsewhere, Japan’s Nikkei was 0.75 percent higher, partly on a lower yen, while Southern Korea’s KOSPI index gained 1.1%.

Australia’s main share index reversed early losses to edge up, led by positive news on the coronavirus front with new infections in the country’s second-most state that is populous of down sharply and allowing authorities to ease a number of the mobility restrictions.

The gains that are broad Asia follow a Wall Street rally on Friday though analysts expect the gains to be short-lived as expectations for financial growth start to falter.

Particularly worrying is just a resurgence of COVID-19 cases in Europe, dousing earlier hopes that authorities might have started to exert some control on the outbreak and raising strains being further businesses currently grappling with losses.

“Clouds have begun to gather over the world that is developed political uncertainty increases in the U.S. and Europe grapples with a resurgence in COVID-19 cases,” Kerry Craig, Global Market Strategist, J.P. Morgan Asset Management.

COVID-19 cases are edging closer to 33 million around the world with 992,470 reportedly dead with Europe seeing a surge in new infections.

“While governments are loathe to re-introduce nationwide lockdowns, localised and sector based restrictions may endure for a while, restraining activity that is economic” Craig included.

Investor focus will next be in the debate that is first U.S. President Donald Trump and rival Joe Biden on Tuesday ahead of the November election.

A performance that is strong Tuesday’s debate by Biden, who currently has a modest lead in betting odds and polls, might improve shares related to global trade and renewable energy, while a perceived victory by Trump could benefit fossil fuel and defense companies.

Market focus will additionally be on progress on a new help that is fiscal within the United States while investors is likely to be closely viewing UK-Europe post-Brexit trade talks while they continue this week.

In currencies, the dollar eased from a near a two-week high against the yen that is Japanese 105.44.

The euro was final at $1.1628, not far from a trough that is two-month of.1611 touched on Friday.

The pound that is british 0.1% to $1.2760.

The risk sensitive dollar that is Australian slightly firmer at $0.7052 after dropping for six consecutive sessions as odds narrowed over the prospect of further monetary policy reducing in the united states.

In commodities, oil prices came under pressure as renewed mobility curbs in various nations to contain a resurgence of coronavirus cases cloud the outlook on fuel demand recovery.

U.S. Brent crude slipped 18 cents to $41.74 a barrel while U.S. crude that is light down 19 cents at $40.06.

Gold ended up being a shade higher at $1,861.8, still a way off an peak that is all-time of $2,000 an ounce touched in August.

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Jonathan Hobbs

Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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