Stocks in Asia were higher for a third straight session on Monday as risk appetite was supported by recent data showing the global economic recovery from the pandemic was on the right track.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.2% to reach its highest since March 18.
South Korea’s KOSPI index was up 0.3% while New Zealand shares added 0.6%.
Japan’s Nikkei was lower by 0.3% while Australia’s benchmark share index was off a shade too with a public holiday in five of the country’s eight states and territories.
Manufacturing data for April that was out last week pointed to a robust start to the second quarter with data hitting record highs in the United States, which has whetted traders’ appetite.
On Friday, U.S. shares ended firmer with the S&P 500 hitting a record intraday peak to end 1.1% higher.
The Dow climbed 0.7% while the Nasdaq Composite added 1.4%. E-mini futures for the S&P 500 were slightly weaker in early Asian trading on Monday.
First-quarter U.S. GDP data is due later in the week with expectations activity will have likely returned to pre-pandemic levels.
“We estimate that the economy will close the output gap and rise above potential in the second half of this year,” ANZ economists wrote in a morning note, suggesting more upside for shares.
Europe “cannot match this, but as 2021 progresses into 2022, the growth differential to the U.S. will narrow.”
While JP Morgan analysts said this may be the last quarter where companies can avoid being penalized for not seeing revenue recover quickly and/or not giving guidance.
Strong recent data meant bonds were sold off, though 10-year U.S. Treasury yields were not far from a recent six-week low on expectations the U.S. Federal Reserve will stay accommodative at its meeting this week.