GLOBAL MARKETS-Asia stocks up as China PMI, U.S. data cheer markets worried over coronavirus surge

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Equities see positives in economic data
* Hong Kong shares not phased by China security bill
* Coronavirus surge remains a risk to markets

By Stanley White and Imani Moise
TOKYO/NEW YORK, June 30 (Reuters) - Asian shares rose on
Tuesday after data showed China's manufacturing sector grew more
than expected in June, a hopeful sign for a global economy still
struggling to recover from the sweeping impact of the
coronavirus crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 0.9%, while U.S. stock futures, the S&P
500 e-minis ESc1 , advanced 0.23%.
Sentiment in the region, which got a boost from overnight
gains on Wall Street thanks to strong housing data, got a
further lift from a survey in China showing a quickening in
activity in its vast factory sector.
The stock market in Australia .AXJO , which has crucial
economic links with China, rose 1.59%, while shares in China
.CSI300 gained 0.72%.
Hong Kong stocks .HSI jumped 1.18%, undeterred by the
Chinese parliament's passage of a security law that will
increase Beijing's control over the former British colony.

The Nikkei .N225 rose 2%, shrugging off a
larger-than-expected decline in Japanese industrial production.
Overall, however, Asian shares are still on course for a 7%
decline over the first half of this year, underscoring the
severity of the pandemic-sparked losses and the challenges
facing investors as global infections continue to rise in a blow
to hopes of a quick recovery.
"Overnight moves in markets were not large but one does get
the distinct impression that markets have got it both ways –
with equities rallying on rebounding data and bonds rallying on
dismal COVID-19 news," said ANZ Research analyst Rahul Khare.
Indeed, for the second quarter Asia ex-Japan shares were on
course for a 17.8% gain, which would be the biggest quarterly
increase since the third quarter of 2009. Stocks appear to have
received an added boost on Tuesday as some investors adjusted
positions on the last trading day of the quarter.
On Monday, the Dow Jones Industrial Average .DJI rose
2.32%, the S&P 500 .SPX gained 1.47% and the Nasdaq Composite
.IXIC added 1.2%.
China's official purchasing managers' index (PMI) released
Tuesday showed factory activity in the world's second-largest
economy grew for a fourth straight month in June. China's
services sector PMI also expanded at a faster pace compared to
the previous month. A recent resurgence in coronavirus infections had led some
investors to question the strength of a rebound in global
economic activity.
The swing in sentiment between hopes and fears has kept
markets on edge.
The yield on benchmark 10-year Treasury notes US10YT=RR
was little changed at 0.6348% in Asia as traders braced for U.S.
non-farm payrolls data on Thursday, which is forecast to show an
improving labour market. U.S. Federal Reserve Chairman Jerome Powell on Monday said
the outlook for the world's biggest economy is "extraordinarily
uncertain" and signalled more monetary stimulus may be
necessary, which could limit gain in yields. Confirmed COVID-19 cases worldwide rose past 10 million and
deaths surpassed 500,000 on over the weekend.
The bulk of new cases were reported in the United States and
Latin America, stoking fears that the outbreak could stall
economic recoveries just as lockdowns begin to ease.
In currency markets, the dollar held onto gains against the
yen JPY= and the Swiss franc CHF= as the recent increase in
coronavirus infections supported safe-haven demand for the
greenback. FRX/
In the onshore market, the yuan CNY=CFXS rose slightly to
7.0685 against the dollar.
U.S. crude CLc1 fell 0.48% to $39.51 a barrel, while Brent
crude LCOc1 slipped 0.31% to $41.58 per barrel, weighed by
concerns about oversupply after Libya cited progress in resuming
oil exports. O/R

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