Asian markets advanced in early trading Monday, as U.S. stock futures gained after comments from Fed chief Jerome Powell and crude oil prices rose toward a two-month high.
Japan’s Nikkei NIK, +0.52% gained 0.7% and Hong Kong’s Hang Seng Index HSI, +0.39% edged up 0.5%. The Shanghai Composite SHCOMP, +0.60% rose 0.4% while the smaller-cap Shenzhen Composite 399106, +0.24% inched up 0.1%. South Korea’s Kospi 180721, +0.68% advanced 0.7% and Australia’s S&P/ASX 200 XJO, +1.17% gained 1.4%. Benchmark indexes in Taiwan Y9999, -0.22% , Singapore STI, +0.73% and Indonesia JAKIDX, +0.06% were mixed.
Data showed Monday that Japan sank into recession in the first quarter of 2020, and that the current quarter is expected to be worse. Japan’s economy shrank 3.4% year-over-year in the January-March period, according to the Wall Street Journal, after a 7.3% decline in the previous quarter due to a sales-tax increase. While that was not as bad as the 4.8% pullback expected by economists, the second quarter is expected to shrink by 20% or more, due to the coronavirus state of emergency imposed in April.
Japanese conglomerate SoftBank Group Corp. 9984, +1.11% said Alibaba co-founder Jack Ma has resigned from its board of directors, and announced the approval of $4.7 billion in stock buybacks.
U.S. Federal Reserve Chairman Jerome Powell told “60 Minutes” on Sunday that the central bank has plenty of ammunition to fight the recession caused by coronavirus-related shutdowns, though he predicted tough times ahead, with the economy contracting more than 30% in the second quarter and unemployment hitting up to 25%.
But Powell said he expects a relatively quick rebound. “You wouldn’t want to bet against the American economy,” he said, noting that a recovery could stretch through next year.
Stock index futures climbed Sunday night, with Dow Jones Industrial Average futures YM00, +1.11% up nearly 300 points following Powell’s interview.
On Friday, the Dow DJIA, +0.25% rose 61 points, or less than 0.3%, to 23,685.42, while the S&P 500 SPX, +0.39% added 11.20 points, or 0.4%, higher to end the session at 2,863.70. The Nasdaq Composite Index COMP, +0.79% closed at 9,014.56 after gaining 70.84 points, or 0.8%. Still, all three indexes finished the week lower, with the Dow down 2.7%, the S&P 500 losing 2.3% and the Nasdaq 1.2% lower.
Late Sunday, U.S. crude oil prices continued rising toward a two-month high as the global balance of supply and demand starts to right itself. After rising about 19% last week, West Texas Intermediate crude for June delivery CLM20, +3.73% was last above $30 a barrel. July Brent crude BRNN20, +2.89% , the global benchmark, gained more than 3%.
The dollar USDJPY, +0.04% gained to 107.12 yen from Friday’s 107.08 yen.
