The Shanghai Composite index-CSI 300 finished the last session of the week with 2% in profits, gaining support from the improved Chinese Services PMI data and on signs for a faster recovery of the local economy after the pandemic fallout.
Global cases: More than 10.84 million
Global deaths: At least 520,785
Countries with most cases: United States (more than 2.73 million), Brazil (more than 1.49 million), Russia (more than 660,000), India (more than 604,000) and Peru (more than 292,000).
Asian Market Reaction:
The CSI300 index ended Friday at a five-year high, posting its biggest weekly gains of nearly 10% since October 2015, while Hong Kong’s Hang Seng index followed with 1% gains.
The Chinese indices gained support this morning after the release of a private survey showing that China’s Services sector grew at its fastest pace in over a decade in June. Specifically, the Caixin/Markit Services Purchasing Manager’s Index (PMI) came at 58.4 for the month, much higher than May’s 55. The 50 level in PMI readings separates growth from contraction monthly.
The CSI300 index surged nearly 30% since it had its pandemic-related bottom on March 20th , gaining support from the massive fiscal and monetary policies from the Chinese government, and the re-opening of the local economy since early April.
Furthermore, investors feel more confident that the Chinese government has the ability and knowledge (based on the previews virus outbreak of SARS), to crush any resurgence of the COVID-19 in the country.
Meanwhile, the rest of the Asian markets finished the week higher, with the Japanese Nikkei 225 and South Korea’s Kospi indices leading the gains with 0.8%, while the Australian ASX 200 finished with 0.4% gains.