Asian stocks set to track upbeat Wall Street despite rising infections

NEW YORK: Asian stocks were set to edge up on Tuesday after oil prices rose and technology firms pushed Wall Street higher, although investors remained worried about fresh coronavirus outbreaks across the globe.

New infections spiked in Latin America, in Brazil in particular, while New York City, the epicenter of the U.S. outbreak, eased restrictions after 100 days of lockdown.

“We’re looking for a modestly positive day,” said Michael McCarthy, chief markets strategist at CMC Markets. “Markets look frothy based on a V-shaped recovery.”

McCarthy added that data on manufacturing will impact the markets in the day ahead, adding that the data may be much worse than expected.

Australian S&P/ASX 200 futures rose 0.58% in early trading. Japan’s Nikkei 225 futures added 1.34% and Hong Kong’s Hang Seng index futures were up 0.80%.

In a sign there was still some demand for safe havens, spot gold added 0.1% to $1,755.53 an ounce.

“Global financial markets began the week slowly as investors and businesses focus on (the end of the quarter) in what has inevitably been the worst quarter for economic growth since World War II,” ANZ Research said in a note. “If nothing else, expect volatility.”

On Wall Street, the Dow Jones Industrial Average rose 0.59%, the S&P 500 gained 0.65% and the tech-heavy Nasdaq Composite added 1.11% to set a record closing high.

The firmer sentiment helped riskier currencies such as the Australian dollar push higher, even as investors saw signs of rising coronavirus outbreaks. The dollar index fell 0.77%, with the euro up 0.13% to $1.1273. The Australian dollar rose 0.33% versus the greenback at $0.693.

U.S. crude rose 0.88% to $41.09 per barrel and Brent was at $43.02, up 1.97% on the day. Tighter supply from major producers led to the rise.

MSCI’s gauge of stocks across the globe gained 0.34%.

Outside of New York, other U.S. states saw rising coronavirus cases.

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In a research note, Commonwealth Bank of Australia (CBA) said a second wave of infections in the U.S. would “elicit a different response to the first wave.”

“Daily US consumer spending continues to track higher despite the pick‑up in infections,” according to the CBA note. “This is evidence that businesses are reopening and consumers are venturing outside to shop.”

Credit rating agency Moody’s warned that the stimulus measures would leave advanced economies with much higher debt than they accumulated during the last financial crisis.