Asian stock market: Bulls track Wall Street gains amid cautious optimism

• Asian shares rise for the day but snap four-week winning streak with mild losses.
• Hopes of US stimulus, Sino-American trade talks confront COVID-19 woes.
• Data from Aussie, Japan and New Zealand have been mostly upbeat.
• Preliminary readings of the monthly PMIs will be the key to watch.

Asian shares turn positive after the previous day’s losses as the upbeat performance of the US stocks join welcome data and an absence of major negatives during Friday’s pre-European trading. While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan gains 1.23% whereas Japan’s Nikkei 225 rises 0.35% to 22,964 as we write.

Wall Street cheered hopes that the US and China are still not defying the phase one deal the previous day. Also pleasing the bulls were gains by technology shares that helped Nasdaq to surge over 1.0%.

Earlier in Asia, Japan’s Consumer Price Index for July flashed welcome prints of 0.3% versus 0.1% YoY. The data preceded August month’s upbeat figures of Jibun Bank Manufacturing PMI, 46.6 versus 45.2. Following that, Aussie Retail Sales and New Zealand Credit Card figures also managed to keep the risk-on mood intact.

Talking about the virus, Australia’s Victoria marked weakness in new cases with 179 level for Thursday, the lowest five weeks, while figures from Tokyo surged past-300 to 339 for the first time since Saturday in Tokyo. It’s worth mentioning that the Japanese government is planning to ease entry barriers for foreign residents while Australian authorities still struggling to tame the pandemic.

Elsewhere, US House Speaker Nancy Pelosi reversed the optimism surrounding the US stimulus talks while recently saying, “Timing is not right for a smaller coronavirus relief bill.”

Against this backdrop, Australia’s ASX 200 remains mostly unchanged around 6,110-15 while New Zealand’s NZX 50 rise over 1.5% following upbeat data and PM Jacinda Ardern’s optimism. Further, stocks from Beijing and Hong Kong cheer the news that the People’s Bank of China (PBOC) injected a net 160 billion yuan into the system, having boosted liquidity by 490 billion yuan last week. It’s worth mentioning that India’s BSE Sensex joins the league of profit-makers amid recently receding virus numbers. Additionally, the US 10-year Treasury yeilds and S&P 500 Futures also portray the mild optimism.

While macros seem dead, traders will keep eyes on the early-month activity data to extend the latest optimism.