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Asia-Pacific Shares Mixed; Foreign Buyers Drive South Korean Chipmakers Higher

By:
James Hyerczyk
Updated: Sep 3, 2020, 08:53 UTC

South Korean shares rose more than 1% on Thursday and extended gains to a third straight session as strong foreign buying powered local chip stocks.

Asian Shares

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The major Asia-Pacific stock indexes finished mixed on Thursday as investors reacted to regional economic releases while awaiting Friday’s U.S. Non-Farm Payrolls report that should shed a little more light on the state of the U.S. labor market. The biggest gain for the session took place in South Korea, while the Shanghai Index in China posted the biggest low.

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 23465.53, up 218.38 or +0.94. South Korea’s KOSPI Index finished at 2395.90, up 31.53 or +1.33% and Hong Kong’s Hang Seng Index closed at 24995.10, down 124.99 or -0.50%.

In China, the Shanghai Index settled at 3384.98, down 19.82 or -0.58 and in Australia, the S&P/ASX 200 Index finished at 6112.60, up 49.40 or +0.81%.

China’s Services Sector Sustains Recovery as Hiring Picks Up

The recovery in China’s service sector activity extended into a fourth straight month in August, an industry survey showed on Thursday, with companies hiring more people for the first time since January.

The Caixin/Markit services’ Purchasing Managers’ Index slipped to 54.0 from July’s 54.1, dipping for the second month after June’s decade high, but staying above the 50-mark that separates monthly growth from contraction.

Firms started to hire more in August after six months of layoffs, indicating some recovery in a labor market that has been hit hard by sharp falls in demand and epidemic restrictions earlier in the year.

“The ongoing resumption of work and normalization of market demand continued to promote the post-epidemic economic recovery,” said Wang Zhe, Senior Economist at Caixin Insight Group.

Australian Trade Data Suggests Economy Still on Shaky Ground

A drop in exports and a weakening construction sector suggests the economy is still on shaky ground after collapsing into recession as a result of the coronavirus pandemic.

Exports fell sharply in July after being one of the rare bright spots during the economy’s record 7.0 percent crash during the June quarter.

Australian Bureau of Statistics data on Thursday showed the international trade balance of goods and services surplus almost halved in July to $4.6 billion from $8.1 billion in June.

This was the result of a four percent drop in exports in the month, compared to a seven percent surge in imports.

South Korea Stocks Jump Over 1% as Chipmakers Rally

South Korean shares rose more than 1% on Thursday and extended gains to a third straight session as strong foreign buying powered local chip stocks. Both the won and the benchmark bond yield weakened.

Chip giant Samsung Electronics Co Ltd ended 3.7% higher, trading a surge in the Philadelphia Semiconductor Index, after Nvidia Corp’s announcement on its new gaming chips in collaboration with Micron Technology Inc and Samsung.

Further boosting sentiment, South Korea’s government announced a plan to create a 20 trillion won ($16.84 billion) fund over the next five years for President Moon Jae-in’s “New Deal” program.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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