Asian stocks suffered a drop in Wall Street and stood near three year highs on Monday, China took the lead as data showed a significant increase in profits earned by industrial firm in the second largest economy of the world.
June saw the percentage profits earned by Chinese industrial firms to rise 17.9 percent to 588.08 billion yuan ($94.98 billion) compared to last year according to the National Bureau of Statistics.
Market expectations have been confirmed by recent data that China’s economy is expanding as a result of targeted stimulus measures provided by the government to support growth.
China’s CSI300 increased 2.3 percent and the Hang Seng 0.8 percent.
Soichiro Monji, chief strategist at Daiwa SB Investment in Tokyo explained that funds from Middle Eastern and Asian investors were resuming as the Muslim fasting month ends.
He alluded towards the geopolitical concerns in Ukraine but expressed relief in the news that the impact will be contained.In fact, one of the key factors in commodities such as oil were geopolitical issues, Brent crude decreased 0.4 percent to $107.96 a barrel but still managed to retain a chunk of its gains from Friday, when it increased more than a dollar as the conflict in Ukraine and progressively deteriorating relations between Russia and the US fueled fresh fears of supply problems.
The focus then turned to whether this week’s data from US would be strong enough to keep fueling risk appetite.
The euro too, suffered on Friday when Germany’s Ifo business climate index didn’t make the economy look very impressive.