Markets: Asia hits August on a positive note
Mihir Kapadia – CEO and Founder of Sun Global Investments, writes on the latest.
In overnight trading in Asia, Stock indices are mostly higher on the first day of August. South Korea led the way with Kospi stock benchmark currently up 0.84 per cent and a near 20 per cent gain in 2017 as it has hit a series of record highs. Australian stocks were also strong today boosted by continuing gains in commodity prices. The S&P/ASX 200 is currently 0.91 per cent higher with miners and oil firms gaining more than 1 per cent. There are more modest gains in indices in China, Japan and Hong Kong while Indian indices are broadly flat.
Global bonds yields have risen a little in the last two days. The yield on the 10-year US Treasury Bond is 1bp higher at 2.301 per cent. Yields in most government bond markets in Europe are also slightly high.
A private survey of China's factory activity rose for a second straight month in July and hit its highest level in four months. This is in contrast to official data which showed renewed weakness in production and demand. The Caixin China manufacturing purchasing managers' index rose to 51.1 in July from 50.4 in June. Sub-indexes of output and new orders expanded at its fastest pace since February, thanks to a solid upturn in new export sales.
South Korea's headline consumer-price index rose 2.2 per cent from a year earlier in July, with inflation accelerating at a faster pace than expected. The July reading was higher than the previous month's 1.9 per cent gain and above the forecast 2.0 per cent.