Skip to content Skip to sidebar Skip to footer

Asian Stocks Rise as gold soar on News of $2 Trillion Europe Stimulus Package

Stocks in Asia Pacific mostly declined in the morning, but mainland Chinese stocks bucked the trend. Gold prices soared to a nine-year high, while the dollar weakened after European Union leaders reached an unprecedented $2 trillion stimulus package.

Mainland Chinese stocks jumped in the morning. The Shanghai composite rose 1.79%, while the Shenzhen composite was up 1.49%. The Shenzhen component jumped nearly 2%.

In Hong Kong, the Hang Seng index was was up 0.37%.

Japan’s Nikkei 225’s lost 0.37%, while the Topix edged down 0.19%. The country’s manufacturing activity contracted for a 13th straight month in July, data showed, according to Reuters.

Over in South Korea, the Kospi rose 0.11%.
Shares in Australia also traded lower, with the S&P/ASX 200 down about 1%. Australia’s retail sales climbed 2.4% in June as its economy continued to reopen, data showed on Wednesday, according to Reuters. That follows a record 16.9% surge in the previous month.

Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan was flat in the morning.

The European Commission, the executive arm of the EU, has been tasked with tapping financial markets to raise an unprecedented 750 billion euros ($857 billion). The funds will be distributed among the countries and sectors most impacted by the coronavirus pandemic, and will take the form of grants and loans.

In addition to the recovery fund, the EU said its next budget, which will fund initiatives between 2021 and 2027, will total 1.074 trillion euros. The two combined bring upcoming investments to the level of 1.824 trillion euros.

The pandemic has not shown signs of abating in recent weeks, with the outbreak surging across the U.S. and reaching record highs in new cases and deaths. Worldwide, the number of cases stand at over 14 million with more than 600,000 deaths, according to data from Johns Hopkins University.

The U.S. dollar index, which tracks the greenback against a basket of its peers, weakened markedly, hitting a four-month low on Tuesday. It was last at 95.123, continuing to decline from levels near 96 earlier this week.

The Japanese yen traded at 106.81 per dollar, strengthening after levels above 107 seen earlier. The Australian dollar soared, changing hands at 0.7128 after seeing levels below 0.70 for most of this year.

Oil prices lost ground in the morning of Asian trading hours. International benchmark Brent crude futures were down 0.74% to $43.99 per barrel. U.S. crude futures also dipped 0.86% to $41.56 per barrel.