Asian shares up as recovery hopes overshadow virus worries
Shares rose in Asia on Tuesday as some regions in Japan resumed close-to-normal business activity, with hopes for economic recovery overshadowing worries over the coronavirus pandemic.
The market focus is shifting to how various nations are adapting to getting back to business while striving to keep new COVID-19 cases in check.
Japan lifted its state of emergency under what Prime Minister Shinzo Abe on Monday called a new lifestyle, with widespread wearing of masks and face shields.
Tokyo’s benchmark Nikkei 225 jumped 2.6% to finish at 21,277.77, in a rebound to levels for the index not touched since early March. Australia’s S&P/ASX 200 surged nearly 3.0% to 5,780.00. South Korea’s Kospi gained 1.7% to 2,027.77. Hong Kong’s Hang Seng added 2.1% to 23,438.25, while the Shanghai Composite advanced 0.8% to 2,840.43.
As is the financial market’s wont these days … even the slimmest of positive news on the COVID-19 front triggers a bullish immune response and another wave of the peak-virus trade,” Jeffrey Halley of Oanda said in a commentary.
U.S. markets were closed for Memorial Day on Monday, while European benchmarks ended higher, reflecting the global investor optimism. France’s CAC 40 jumped nearly 2.2% to end the day at 4,539.91. Germany’s DAX surged 2.9% to 11,391.28. Trading was closed in Britain for a bank holiday.
Yoshimasa Maruyama, chief market economist with SMBC Nikko Securities, said global trade and production appeared to be bottoming out in May, though demand will likely recover gradually.
Comments from China’s central bank governor on support for its slowing economy also lifted sentiment.
Yi Gang, in an interview on the bank’s website, promised to push down borrowing costs for entrepreneurs and support development of the real economy.
He said the People’s Bank of China will pursue more flexible monetary policy. He said that was in line with official goals announced Friday by Premier Li Keqiang of helping smaller and private companies survive the coronavirus pandemic.
The interview was published as China’s largely ceremonial National People’s Congress holds its annual session, where other senior officials have stressed the need to push growth higher and create jobs, while steering clear of excess government spending.
Investors are also awaiting U.S. consumer confidence data for May and home sales for April, indicators that might give further clues into the severity of the downturn brought on by the pandemic.
Benchmark U.S. crude gained 1.21 to 34.46 a barrel in electronic trading on the New York Mercantile Exchange. It closed at 33.25 on Friday, and markets were closed on Monday.
Brent crude oil, the international standard, rose 72 cents to 36.25 a barrel.
The U.S. dollar rose to 107.84 Japanese yen from 107.69 yen late Monday. The euro rose to 1.0929 from 1.0898. (AP)