Asian Stocks Up After Boost from Positive U.S. Data, But Headwinds Remain

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By Gina Lee

Investing.com – Asian stocks were mostly up on Tuesday morning, buoyed by strong American economic data released overnight. But a stalemate in the U.S. Congress over the latest stimulus measures, as well as ever-increasing global COVID-19 case numbers, remain a challenge.

The Institute for Supply Management’s U.S. manufacturing purchasing managers index reported a better-than-expected expansion, which boosted U.S. markets.

“It has been an upbeat U.S. trading session and Asia will absorb the leads accordingly,” Chris Weston, head of research at Pepperstone, said in a note.

Meanwhile, some investors were optimistic that the U.S. Congress would reach an agreement soon.

“Momentum begets more momentum, and the markets have been overbought we believe, but the demand to buy has been there,” Bob Phillips, managing principal at Spectrum Management Group, told Bloomberg.

“There’s a big desire from both parties to get some kind of stimulus passed. The way the market is reacting, I think the market is expecting that.”

U.S. House Speaker Nancy Pelosi is due to meet with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows later in the day to continue negotiations, raising hopes for a breakthrough sometime soon.

The “only good thing we can say on the political impasse in Washington is that negotiations remain ongoing,” National Australia Bank (OTC:NABZY) said in a note.

Japan’s Nikkei 225 rose 1.34% by 11:37 PM ET (4:37 AM GMT) and South Korea’s KOSPI gained 1.11%.

Down Under, the ASX 200 jumped 1.65%. Investors will be watching the Reserve Bank of Australia’s announcement of its policy decision later in the day, after Melbourne imposed extended and tightened lockdown measures over the weekend.

Hong Kong’s Hang Seng Index inched up 0.80%.

Meanwhile, U.S.-China tensions are also up heating up after U.S. President Donald Trump ordered Chinese company TikTok to sell its U.S. operations to a U.S. company or close them by mid-September.

China’s Shanghai Composite was up 0.09%, reversing some earlier losses. The Shenzhen Component was down 0.38%.

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