Asian Shares Broadly Higher On Stimulus Optimism

Asian stocks rose broadly on Thursday, although Chinese and Hong Kong markets fell after the United States said it would now require senior Chinese diplomats to get State Department approval before visiting U.S. university campuses or meeting local officials.

The State Department said it would also take action to help ensure all Chinese embassy and consular social media accounts were “properly identified.”

The move came as a response to what Washington said was Beijing’s restrictions on American diplomats based in China. China said it will make “legitimate responses” according to the situation.

China’s Shanghai Composite Index fell 19.82 points, or 0.6 percent, to 3,384.98. The services sector in China continued to expand in August, albeit at a slightly slower pace, the latest survey from Caixin showed with a services PMI score of 54.0, down from 54.1 in July.

Hong Kong’s Hang Seng Index dropped 0.5 percent to 25,007.60. Private sector business conditions in Hong Kong continued to worsen in August, and at a faster rate, the latest survey from IHS Markit revealed with a PMI score of 44.0., down from 44.5 in July.

Japanese shares hit a six-month high after Chief Cabinet Secretary Yoshihide Suga announced his candidacy for the ruling Liberal Democratic Party’s presidential election, formally entering the contest to succeed Shinzo Abe as the country’s next prime minister.

The Nikkei 225 Index climbed 218.38 points, or 0.9 percent, to 23,465.53, its highest close since February 21 as the yen slipped marginally and market participants pinned hopes on more global and domestic economic stimulus. The broader Topix closed 0.5 percent higher at 1,631.24.

Heavyweight Fast Retailing surged 3.6 percent after reporting strong domestic sales for August. Shin-etsu Chemical, a manufacturer of semiconductor wafers, advanced 3.7 percent and game maker Nintendo rose 1.6 percent.

Cable TV operator Sky Perfect JSAT Holdings rallied as much as 15.7 percent after posting a surprise jump in profit.

Investors shrugged off data showing that the services sector in Japan contracted at a slightly faster pace in August.

Australian markets rose notably, with financials and healthcare firms leading the surge on hopes of additional U.S. stimulus.

The benchmark S&P/ASX 200 Index advanced 49.40 points, or 0.8 percent, to 6,112.60, extending gains for a second straight session. The broader All Ordinaries Index ended up 49.20 points, or 0.8 percent, at 6,301.

The big four banks rose between 0.8 percent and 1.8 percent. Healthcare stocks such as CSL, Cochlear and Resmed gained 1-3 percent.

Gold miners ended broadly lower after bullion prices tumbled over 1.5 percent overnight amid the dollar’s rebound. Newcrest Mining shed 0.8 percent and Regis Resources dropped 1.3 percent.

In economic news, Australia’s service sector returned to contraction in August as lockdown measures were re-imposed in Victoria following a surge in new Covid-19 infections, final survey data from IHS Markit showed.

The Commonwealth Bank final services Purchasing Managers’ index fell to 49.0 from 58.2 in July. The flash reading was 48.1.

Another report showed the country posted a seasonally adjusted merchandise trade surplus of A$4.607 billion in July – shy of expectations for A$5.4 billion and down from A$8.202 billion in June. The construction sector PMI dropped to 37.9 in August from 42.7 in the previous month.

Seoul stocks rose for the third straight session as a nearly 3 percent rally in the Philadelphia Semiconductor Index, a global gauge for the chipmaking sector, helped lift chipmaking heavyweights.

The benchmark Kospi jumped 31.53 points, or 1.3 percent, to 2,395.90. Market bellwether Samsung Electronics jumped 3.7 percent and No. 2 chipmaker SK Hynix surged 4.2 percent.

New Zealand shares rallied after SkyCity Entertainment said its year-old online gambling site has already turned a profit. The benchmark NZX 50 Index soared 152.07 points, or 3 percent, to 12,055.05, while shares of the casino operator spiked 6.8 percent.

U.S. stocks posted strong gains overnight after Treasury Secretary Steven Mnuchin suggested to lawmakers that the Trump administration might be open to a stimulus package as large as $1.5 trillion.

On the economic front, payroll processor ADP reported much weaker than expected private sector job growth in August, while the Federal Reserve’s Beige Book noted economic gains were modest over the past several weeks.

The tech-heavy Nasdaq Composite rallied 1 percent and the S&P 500 climbed 1.5 percent to reach fresh record closing highs, while the Dow Jones Industrial Average jumped 1.6 percent.

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