Asian shares, bitcoin rally in positive day for financial markets

US-China trade talks, corporate earnings give shares a boost despite expectations of more bad US employment data.

    Gains in Asian stocks on Friday followed a positive session on Wall Street that was lifted by better-than-expected corporate earnings [File: Kiyoshi Ota/Bloomberg]
    Gains in Asian stocks on Friday followed a positive session on Wall Street that was lifted by better-than-expected corporate earnings [File: Kiyoshi Ota/Bloomberg]

    Shares in Asia climbed in early trade on Friday in the run-up to the release of the United States's jobless numbers as US and China's trade chiefs reaffirmed their cooperation in a phone call and upbeat corporate earnings lifted sentiment.

    Oil prices also rose as investors weighed Saudi Arabia's global price hike, while bitcoin posted a surge above $10,000 for the first time since late February as investors piled into the cryptocurrency in the run-up to a technical event known as halving.

    More:

    Japan saw gains of more than 1 percent, the largest moves, while shares also rose 0.9 percent in Hong Kong and 0.4 percent Shanghai.

    South Korea's Kospi climbed 1.3 percent while Australia's S&P/ASX 200 gained 0.9 percent.

    Chinese Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and United States Trade Representative Robert Lighthizer held a phone call late on Thursday in which they spoke about US-China trade, the US government said in a statement.

    The two sides agreed there was "good progress" made to meet the phase one agreement and that they expect to meet the obligations under the deal, it said.

    In US futures, S&P 500 contracts climbed following gains on Thursday.

    The positive sentiment follows gains of over 1 percent in main US and European stock indexes on Thursday.

    Looming on the market horizon, however, is a report on Friday that is expected to show that the US April unemployment rate jumped to 16 percent, its highest rate in more than 70 years, as people stayed home to thwart the spread of the novel coronavirus.

    "While the deterioration is known, many will be asking whether risk sentiment can stand such a sticker shock," Tapas Strickland of National Australia Bank said in note on Friday.

    Markets have already had a taste of such weakness in weekly claims for unemployment benefits that added up to some 33.5 million people over the past few weeks, roughly one of every five American workers.

    Roughly 21 million more people in the US found themselves out of work in April, according to a median forecast in a Bloomberg survey of economists

    US Treasuries prices rose despite enormous deficit financing and interest rate futures toying with the negative rates.

    "While the collapse in economic activity is historic, so too is the global policy response to cushion the impact and support a recovery," JPMorgan Chase & Co strategists including Marko Kolanovic wrote in a May 7 note. "We expect risky assets to continue to recover as economies reopen," though the pace of gains will likely slow, they wrote.

    Bitcoin surges

    In cryptocurrency markets, bitcoin gained for a third straight day to reach a level not seen since February 24 before its upcomng halving, which will see production cut by 50 percent in one of the few observable events known to materially effect price.

    A rule written into bitcoin's underlying code slashes the number of new coins awarded to cryptocurrency miners - programmers who are rewarded for processing complex mathematical computations.

    "With the bitcoin halving fast approaching, we believe a short-term pullback is highly likely immediately post-halving, as traders begin taking profits," said Lennard Neo, head of research at Stack AM Pte, which provides cryptocurrency trackers and index funds.

    "In the longer-term, however, we can expect bitcoin to register significant price appreciation toward the end of 2020 and early 2021."

    Elsewhere, oil was set for its second weekly gain as supply cuts from the world's biggest producers and a slow pick-up in demand began to rebalance prices.

    Saudi Arabia, the world's largest oil exporter, raised prices for almost all grades of crude in June, suggesting it is more interested in supporting a recovery in prices than winning market share.

    US West Texas Intermediate futures rose 1.5 percent to almost $24 a barrel early on Friday, while Brent crude gained 1.2 percent to $29.80.

    There was also more evidence demand is starting to come back in the US. Gasoline supplied, an indicator of consumption, rose by the most in almost two years last week, while Genscape Inc reported that stockpiles at the storage hub at Cushing, Oklahoma have fallen since last Friday, which would be the first contraction since late February if confirmed by government data.

    SOURCE: News agencies