Reuters - Share markets in Asia started strong Thursday with buying based on a sustained recovery in China's services sector and the prospect of additional U.S. stimulus. The dollar gave back earlier gains.
MSCI's broadest index of Asia-Pacific shares outside of Japan rose 0.5 percent for its third consecutive session to hover near a recent two-and-a-half-year high.
Australia's S&P/ASX 200 rose 0.9 percent and Japan's Nikkei 225 added 1.3 percent. Hong Kong's Hang Seng index was up 0.2 percent while China's blue chip CSI300 was 0.35 percent higher.
E-mini futures for the S&P 500 were even.
An important survey showed China's service-sector activity grew for a fourth consecutive month in August, staying above the 50-point level, while companies hired more people for the first time since January.
The services sector, which accounts for about 60 percent of the economy and half of urban jobs, had been slower to return to growth initially than large manufacturers but its recovery has gathered pace in recent months as COVID-19 restrictions on public gatherings lifted.
Analysts expect the equity-markets rally to extend further as investors focus on the "easy money" dimension. Risks were growing, however.
"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.
"The economic recovery remains fragile and there is still considerable uncertainty over the growth trajectory beyond the initial rebound phase," Berg said.
China-U.S. tensions and U.S. presidential elections were other risks - with a Democrat victory likely seeing a "major switch in policy direction and a different regulatory and tax regime."
On Wall Street overnight the three main equity indexes moved higher with gains led by defensive sectors such as utilities as the technology sector paused.
"The equity market rally overnight (was) characterized by a rotation away from the tech titans that have led gains this year. That broadening of the equity rally is in itself a signal of confidence in a broader economic recovery," said Steve Miller, investment strategist at GSFM.
Data Wednesday showed U.S. private employers hired fewer workers than expected for a second straight month in August - suggesting that the labor market recovery was slowing.
A separate report showed factory orders rose more than expected in July - pointing to continued improvement in the manufacturing sector.
In currencies, the dollar gave back some of the gains from earlier this week with its index down 0.1 percent. The dollar was higher on the yen. The euro was off 0.02 percent to $1.1851.
In commodities, U.S. crude added 15 cents to $41.66 while Brent gained 5 cents to $44.48 a barrel. Spot gold was higher at $1,946.8 an ounce.
