Asian stocks rallied higher on Tuesday after impressive data reports from China’s manufacturing sector.
European shares also printed a positive result with the pan-European Euro Stoxx 50 futures up 0.74% in early trade. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, to regain some ground lost on Monday.
The Hang Seng Index in Hong Kong traded 0.3% higher while the Shanghai Composite also recovered early losses to stand 0.1% higher. Japan’s Nikkei 225 erased early losses to trade flat.
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The Caixin/Markit Manufacturing Purchasing Managers’ Index(PMI) revealed China’s factory activity expanded at the fastest rate in nearly ten years in the month of August, triggered by the first increase in new export orders this year.
Futures on the S&P 500 Index gained 0.5% as of 10:48 a.m. London time.
The Stoxx Europe 600 Index climbed 0.2%. The MSCI Asia Pacific Index increased by 0.3%. The MSCI Emerging Market Index gained 0.9%.
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Stephen Innes, Chief Global Market Strategist at AxiCorp in a note to Nairametrics spoke about the prevailing macros affect the global equities market He said ;
“Stocks have had a choppy session in Asia, with investors being tossed around between coronavirus resurgence, central bank stimulus, and the convincing economic rebound in China.
“European markets look set for a higher opening after yesterday’s sell-off into month-end.
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“The 1% selloff into month-end camouflaged a relatively concrete performance in EU stocks, given its value bias and lack of retail involvement, and as the month-end was exacerbated by reweighting flows.
“The move higher in FAANGs and semiconductors remains relentless and brutal to rationalize given the less encouraging news flow. Sentiment remains extremely bullish, and I am repeatedly told there are no alternatives, ‘semis are the only game in town,’ and valuations do not matter.”
The focus for most investors now moves to the September Federal Open Market Committee (FOMC) decision.