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Asian stock rose on Monday ahead of United States non-farm payrolls for May, while the extension of production cuts helped oil prices to show some strength.
With an expected loss of more than eight million, the jobs report released on Friday shows that employment rose by 2.5 million.
However, US unemployment is still well above post-financial crisis levels and is likely to remain so for quite some time.
As countries continue to ease lockdown measures and with trillions of dollars in stimulus and central bank support pledged, the global equity market has surged since hitting a trough in March.
While there are still uncertainties over the coronavirus impact on corporate earnings, investors were encouraged by the reopening of economies which is likely to lead to a rebound in profitability later this year.
Japan’s Nikkei rose more than one percent while Hong Kong’s Hang Seng Index inched up for a sixth straight gain. South Korea’s Kospi added 0.1%, The Shanghai Composite closed up 0.2%, while India, Taiwan, and Singapore jumped more than one percent, with Indonesia 3% higher.
In early trade, London, Paris, and Frankfurt dropped on profit-taking after surging Friday. Sydney was closed for a holiday.
Jason Wong at BNZ markets stated that the jobs report data are consistent with activity indicators that show a recovery in activity as US lockdowns eased and gave increased confidence to the people.
Meanwhile, Europe continues to reopen to some semblance of normality, providing a much-needed boost to the tourism industry.
News that major oil producers had agreed to extend output cuts of almost 10 million barrels a day for another month through to the end of July has added some positive sentiment.
The deal provided further support to crude prices, which have surged over the past two months thanks to the cuts and the easing of lockdowns that has boosted demand.
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