The major Asia-Pacific stock indexes finished mixed, but mostly higher on Wednesday as investors shrugged off Hong Kong’s first arrest under China’s new national security law and rapidly rising COVID-19 infections. Investors were influenced mostly by a private survey that showed better-than-expected Chinese factory activity. Shares in Australia and China finished higher, while prices fell in Japan and South Korea. Hong Kong was closed.
At 07:26 GMT, Japan’s Nikkei 225 Index settled at 22121.73, down 166.41 or -0.75%. South Korea’s KOSPI Index closed at 2106.70, down 1.63 or -0.08%.
In China, the Shanghai Index settled at 3025.98, up 41.31 or +1.38% and Australia’s S&P/ASX 200 Index closed at 5934.40, up 36.50 or +0.62%.
Hong Kong Makes First Arrest Under China’s New National Security Law
Hong Kong police announced on Wednesday that they have made their first arrest since China’s national security law came into force. The contentious National Security Law was passed on Tuesday and took effect hours later.
It stipulates that a person who acts with a view to “undermining national unification” of Hong Kong with the mainland faces punishment of up to lifetime, depending on the severity of the offense.
Under the new law, many of Hong Kong’s protests that took place last year would be punishable by law.
US COVID-19 Infections Continue to Surge, Threatening the Recovery
The U.S. recorded 47,000 infections on Tuesday, its biggest single-day spike since the pandemic began. U.S. infection rates have surged over the past few weeks with some states reimposing restrictions on business and personal activity.
Coronavirus cases more than doubled in 14 U.S. states last month, a Reuters analysis showed, and fears are growing that the caseload could prompt fresh lockdowns.
“Clearly we are not in total control right now,” the country’s top infectious disease expert, Anthony Fauci, told a Senate committee on Tuesday, adding that cases could increase by as much as 100,000 daily if the outbreak is not contained.
The surge has prompted California, Texas and Florida to shut recently re-opened bars in the last few days, while Australia has locked down parts of its second-biggest city, Melbourne, to try to stop a spike in cases there.
Asia-Pacific Economic News
The latest boost to sentiment came from Chinese factory activity gathering steam in June, with the Caixin/Markit manufacturing PMI rising to 51.2 compared with expectations for 50.5. The official manufacturing PMI released Tuesday also showed factory activity in China expanding in June.
The Bank of Japan’s quarterly Tankan survey released Wednesday showed a worsening business mood in the country. The headline index for large manufacturers’ sentiment worsened to -34 in June – its lowest level since June 2009, according to Reuters – as compared with -8 in March.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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