By Gina Lee
Investing.com – Asian stocks were mostly up on Thursday morning, with services sector data released by Japan and China earlier in the day slightly lower than expected.
Japan reported an of 45, slightly below July’s 45.4, while China separately said that the for August was 54 against July’s reading of 54.1. Although China stayed above the 50-mark indicating expansion, the Japanese reading remained below the mark.
Japan’s rose 1.28% by 11:56 PM ET (4:56 AM GMT), with Yoshihide Suga announcing his candidacy for the Liberal Democratic Party leadership on Wednesday and formally entering the contest to succeed Shinzo Abe as the country’s next prime minister.
China’s edged down 0.06% and the was up 0.49%.
Hong Kong’s was down 0.40%, with the city set to relax its social distancing measures even further. Dine-in hours at restaurants will extended by an hour to 10pm and gyms will be allowed to reopen from Friday.
South Korea’s jumped 1.47% and the gained 0.80%.
Some investors expect a stock rally to extend further over the “easy money” perception but warned of risks ahead.
“I think we’re now at a point where tactically it makes sense to be more prudent than two or three months ago as there are still a number of significant risks for investors to contend with,” said Scott Berg, portfolio manager of T. Rowe Price’s global growth equity strategy, told Reuters.
“The economic recovery remains fragile and there is still considerable uncertainty over the growth trajectory beyond the initial rebound phase,” he added.
Meanwhile, the U.S. released data painting a mixed picture for economic recovery, with a possible slowdown in the labor market’s recovery as the number of COVID-19 continues to rise globally and government funding to support both employers and employees starts to dry up. showed that U.S. private employers hired 428,000 workers in August, much smaller than the forecasted 950,000. The U.S. Federal Reserve’s Beige Book also showed an increase in furloughed workers losing their jobs permanently in some parts of the U.S.
Separate data also showed that rose 6.4% month-on-month in July, slightly higher than the predicted 6%.
The U.S. and Europe are also due to release PMI figures later in the day.
However, some investors struck a warning note over stocks’ overreliance on central bank stimulus measures.
“Markets continue to show unrestrained faith in the capacity of central bank liquidity to chart a relatively smooth path for the global economy out of the COVID-19 challenges,” GSFM investment strategist Stephen Miller told Bloomberg.
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