Shares rose in Asia on Monday, shrugging off a weak close last week on Wall Street after Japan's central bank reported a strong improvement in business sentiment.
Tokyo’s Nikkei 225 climbed 0.5% and shares were also higher in Shanghai, Seoul and Sydney. Hong Kong’s Hang Seng declined.
The quarterly “tankan” survey by the Bank of Japan showed business sentiment has improved sharply with expectations for a recovery from a year-long recession.
The main measure of business conditions of large manufacturers rose to minus 10 from minus 27. It showed rebounds in all categories, both manufacturing and nonmanufacturing companies, large and small. It was a marked improvement from the past several quarterly reports as Japan battled the coronavirus pandemic.
The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.
The Nikkei picked up 125 points to 26,780.36. In Hong Kong, the Hang Seng shed 0.1% to 26,479.46. The Shanghai Composite index rose 0.3% to 3,358.79 and South Korea's Kospi was up less than 0.1% at 2,771.22. Australia's S&P/ASX 200 gained 0.5% to 6,677.50.
U.S. markets ended last week on a downbeat note. Benchmarks pulled further away from their recent highs Friday as prospects for another aid package from Washington faded while a surge in virus cases is threatening to inflict more damage on an already battered economy.
The proposed $900 billion aid package from a bipartisan group of lawmakers has essentially collapsed because of continued partisan bickering.
But President Donald Trump signed a temporary government-wide funding bill into law, averting a federal shutdown at midnight and buying Congress time for the on-again, off-again talks on COVID-19 aid.
“Given these talks have been running since July, the market may be bored to tears, but if the stimulus door slam shut before Christmas, it could still change the positive vaccine mood music," Stephen Innes of Axi said in a commentary.
The S&P 500 slipped 0.1% to 3,663.46, its third-straight decline since it set a record high on Tuesday. It ended the week 1% lower after two weeks of solid gains.
Treasury yields fell broadly, a signal that traders were seeking to lessen their exposure to riskier holdings. On Monday, the yield on the 10-year Treasury was at 0.90%, up from 0.89% on Friday.
The Dow Jones Industrial Average got a boost from Disney, which hit a new high after giving investors an encouraging update on subscriber growth and future plans for its Disney Plus streaming service. The index rose 0.2%, to 30,046.37. The tech-heavy Nasdaq lost 0.2% to 12,377.87. The Russell 2000 small-cap index gave up 0.6% to 1,911.70.