Asia stocks up as China PMI, U.S. data cheer markets worried over coronavirus surge

TOKYO/NEW YORK (Reuters) – Asian shares rose on Tuesday after data showed China’s manufacturing sector grew more than expected in June, a hopeful sign for a global economy still struggling to recover from the sweeping impact of the coronavirus crisis.

FILE PHOTO: A man wearing a protective face mask walks past the Singapore Exchange (SGX) in central business district area in Singapore, April 7, 2020. REUTERS/Edgar Su

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.9%, while U.S. stock futures, the S&P 500 e-minis, advanced 0.23%.

Sentiment in the region, which got a boost from overnight gains on Wall Street thanks to strong housing data, got a further lift from a survey in China showing a quickening in activity in its vast factory sector.

The stock market in Australia, which has crucial economic links with China, rose 1.59%, while shares in China gained 0.72%.

Hong Kong stocks jumped 1.18%, undeterred by the Chinese parliament’s passage of a security law that will increase Beijing’s control over the former British colony.

The Nikkei rose 2%, shrugging off a larger-than-expected decline in Japanese industrial production.

Overall, however, Asian shares are still on course for a 7% decline over the first half of this year, underscoring the severity of the pandemic-sparked losses and the challenges facing investors as global infections continue to rise in a blow to hopes of a quick recovery.

“Overnight moves in markets were not large but one does get the distinct impression that markets have got it both ways – with equities rallying on rebounding data and bonds rallying on dismal COVID-19 news,” said ANZ Research analyst Rahul Khare.

Indeed, for the second quarter Asia ex-Japan shares were on course for a 17.8% gain, which would be the biggest quarterly increase since

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