By Swati Pandey and Imani Moise
SYDNEY/NEW YORK, July 2 – Asian stocks hovered near four-month highs on Thursday on hopes of a vaccine for COVID-19 while copper prices jumped to a more than six-month peak on a better global outlook and supply fears in top producer Chile.
All eyes are on U.S. employment data, due later in the day, which are expected offer further cues into how the world’s largest economy is coping with a rise in coronavirus cases in several states.
In a sign the positive sentiment will extend elsewhere, E-minis for S&P500 rose 0.3% while futures for Euro Stoxx 50 rose 0.8% and those for Germany’s DAX climbed 0.8%. London’s FTSE futures added 0.6%.
Risk sentiment was whetted by a COVID-19 vaccine from Pfizer and Germany’s BioNTech, which was found to be well tolerated in early-stage human trials.
A vaccine for COVID-19, which has killed more than half a million people globally and shut down the world economy, has been long anticipated.
“Based on a vaccine trial containing 45 people, including placebos, the V-shaped recovery gnomes, are once again, reaching for the sky,” said Jeffrey Halley, Senior Market Analyst, Asia Pacific at OANDA.
MSCI’s broadest index of Asia Pacific shares outside of Japan rose 1.5% to near levels seen in early March.
All major Asian indexes were upbeat with Japan’s Nikkei rising 0.1%, China’s blue-chip index adding 1.7% while Hong Kong’s Hang Seng index climbed 1.8%.
U.S. employment figures will help indicate whether the world’s largest economy can sustain its fragile recovery as new COVID-19 cases accelerate in several southern states.
Economists polled by Reuters expect private employers to show 2.9 new million new jobs June, which would follow a surprise increase in May. Casting some doubt over that projection, however, was a smaller-than-expected increase in jobs seen in the ADP report on Wednesday.
“A better-than-expected outcome could go some way to settling the near-term debate that the U.S. labor market will heal relatively quickly and justify new highs in U.S. equities,” said Stephen Innes, strategist at AxiCorp.
Wall Street ended Wednesday higher after key economic indicators showed a rebound in Chinese manufacturing activity as it recovers from the pandemic while sharp declines in European factory activity eased.
Equity investors shrugged off concerns about Hong Kong where police arrested more than 300 people protesting sweeping new laws introduced by China to snuff out dissent.
Those developments have raised concerns about China’s already strained relations with its major western trading partners, particularly the United States.
In commodities, the most-traded August copper contract on the Shanghai Futures Exchange touched 49,570 yuan ($7,016.28) a tonne, its highest since Dec. 30, 2019.
Manufacturing activity rebounded in the United States in June, while the factory sector in Germany, Europe’s largest economy, contracted at a slower pace and top copper consumer China posted better-than-expected manufacturing data.
Meanwhile in Chile, where the number of COVID-19 cases have been climbing, miner BHP said it would begin to slow production at its small Cerro Colorado copper mine in the country.
Elsewhere, oil prices climbed and gold eased while the dollar was steady as encouraging macro data prompted investors to take on more risk.
Brent crude climbed 17 cents to $42.20 a barrel. U.S. crude rose 14 cents to $39.96 a barrel. U.S. gold futures were 0.21% lower, at $1,776.20.
The safe haven greenback was unchanged against the Japanese yen at 107.45. The euro was a shade higher at $1.1267 while sterling was slightly firmer at $1.2497.
The risk sensitive Australian and New Zealand dollar were 0.2% and 0.4% stronger respectively.
That left the dollar index at 97.044.
(Editing by Sam Holmes and Lincoln Feast.)