Asian stocks head higher as crude gains, Wall Street rebounds on tech gains
With stocks on Wall Street closing higher overnight, led by gains for technology giants that calmed investors who worried about growing tensions between the US and China, Asian stocks are expected to rise today.
Trends on the Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, gained 1.5 per cent to 9,62 as of 8:00 a.m.
Early on Tuesday trading in Asia, futures for the S&P 500 rose 0.1 per cent and the Australian S&P/ASX 200 futures advanced 0.32 percent. Hong Kong’s Hang Seng index futures rose 0.24 per cent. Japan and mainland China markets are shut on account of public holidays.
The Dow Jones Industrial Average (DJIA) added 26 points or 0.1 per cent to 23,750 after a choppy session.
The S&P 500 advanced 12 points, or 0.4 per cent, to 2,843, driven by gains in Microsoft, Apple and Amazon, and the Nasdaq Composite rose 106 points, or 1.2 per cent, to 8,711.
Microsoft, the biggest company in the S&P 500 index, rose about 2.5 per cent. Tech firms constitute roughly a quarter of the index by market value, which gives them sway over the market.
Market sentiment was buoyed by New York Governor Andrew Cuomo outlining a phased reopening of business in the US state hardest hit by the novel coronavirus.
Rising crude prices also supported the major US indices, which had opened lower but edged up to end a two-session losing streak.
On Tuesday, crude prices climbed in early trade on expectations that fuel demand will begin to pick up as some US states and nations in Europe and Asia began easing coronavirus lockdown restrictions.
Brent crude futures hit a high of $28.37 a barrel in early trade and were up 4.1 per cent, or $1.12 cents, at $28.32. West Texas Intermediate (WTI) crude futures rose as much as 8.2 per cent to a three-week high of $22.06 and were up 7.6 per cent, or $1.55, at $21.94 at 0108 GMT.
On Monday, equity benchmark Sensex crashed over 2,000 points dragged lower by index-heavyweights HDFC, HDFC Bank, IndusInd Bank, ICICI Bank, TCS and Infosys amid global sell off due to the coronavirus spread, US-China spat, sharp falls in earnings of top Indian corporates and figures indicating that manufacturing activity has fallen to all time lows.
Extension of the countrywide lockdown, which is going to further affect economic activity, also weighed on investor sentiment
On the NSE, the Nifty ended at 9,294, down 567 points or 5.7 per cent on the day.
The weak PMI report that came in during the market hours, reflecting a combination of factors including widespread factory closures, slumping demand and supply shortages, all linked to the COVID-19 outbreak, also weakened the sentiment further.
PMI revealed contraction in the manufacturing sector with the index dropping to 27.4 in April as against 51.8 in March.
Wisdom Capital market analysts believe that with talk now moving to lifting the lockdown across India, April will have hopefully represented the eye of the storm in terms of the coronavirus impact on the Indian economy, meaning the rate of decline will now likely start to moderate.
Meanwhile, domestic rating agency ICRA on Monday projected that India’s GDP might contract by as much as 20 per cent in the June quarter and is expected to overcome some lost ground in the remainder of the year but still close 2020-21 down by up to 2 per cent. ICRA’s earlier economic prediction was a range, according to which the GDP may either expand by 1 per cent or contract by 1 per cent in 2020-21.