Asian stocks look set to extend a global rally amid broad gains for equities led by financial shares and end-of-month portfolio adjustments. The dollar held losses.
Futures pointed to modest advances in Japan, Australia and Hong Kong. U.S. stocks snapped four weeks of declines. S&P 500 futures edged higher. Banks led the S&P 500 Index to its biggest gain in two weeks as investors found buying opportunities after the gauge fell to its lowest since July last week. HSBC Holdings Plc added almost 9% after its biggest shareholder raised its stake, while an index of lenders rose the most a month. Shares in Europe rose the most in three months.
Signs that U.S. politicians are moving toward new fiscal stimulus has boosted investor sentiment, while the Federal Reserve continues to provide liquidity. Stronger economic reports from China also lifted investor sentiment, with data over the weekend showing profits at Chinese industrial companies grew for a fourth consecutive month in August.
Still, caution remains, with traders awaiting the first U.S. presidential debate as well as the last U.S. employment report, on Friday, before the November election.
“We remain in a buy on dip mode, but do not believe we have yet reached the bottom,” said Sebastien Galy, senior macro strategist at Nordea Investment Funds SA, in a note. Equity markets are doing better, “driven by expectations of month-end rebalancing of portfolios and some optimism. Fluctuations with an economic recovery are actually quite normal, but do suggest we have not finished this consolidation in equities,” he said.
Here are some key events coming up:
- On Tuesday, the first U.S. presidential debate will take place between President Donald Trump and Democratic opponent Joe Biden.
- China purchasing manager indexes are due Wednesday, and expected to show September manufacturing improved slightly while non-manufacturing moderated from August’s level.
- The EIA crude oil inventory report comes out Wednesday.
- The September U.S. employment report on Friday will be the last before the November election.
These are the main moves in markets:
- S&P 500 futures rose 0.2% as of 8:12 a.m. in Tokyo. The S&P 500 Index gained 1.6%.
- Nikkei 224 futures rose 0.5%.
- Australia’s S&P/ASX 200 Index futures gained 0.6%.
- Hong Kong’s Hang Seng Index futures rose 0.6% earlier.
- The yen traded at 105.53 per dollar.
- The offshore yuan was at 6.8177 per dollar.
- The Bloomberg Dollar Spot Index was little changed.
- The euro traded at $1.1669.
- The British pound was at $1.2846 after jumping 0.7%.
- The yield on 10-year Treasuries was steady at 0.65%.
- Australia’s 10-year bond yield rose one basis point to 0.78%.
- West Texas Intermediate crude traded little changed at $40.59 a barrel.
- Gold was at $1,881.46 an ounce after strengthening 1.1%.
— With assistance by Vildana Hajric, and Claire Ballentine
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