Asia : Markets extend gains on hopes virus crisis is easing
[HONG KONG] The easing of lockdowns around the world and signs that economies are slowly recovering provided further impetus for Asia n stocks Tuesday, though traders remain on edge over China-US tensions and growing unrest across several large American cities. Read more at The Business Times.
Tokyo rose 0.8 per cent, while Hong Kong climbed 0.5 per cent after a more than three percent surge Monday.Shanghai added 0.1 per cent and Seoul was up 0.5 per cent after data showed South Korea's economy shrank less than first thought in the first quarter.
Singapore rose more than one per cent as the city began easing its own shutdown measures and Manila also climbed more than one per cent. There were healthy gains in Jakarta, Wellington and Taipei, though Sydney was slightly lower.Investors appeared to brush off news that China had ordered its state-run agricultural firms to temporarily halt buying some US farm goods, which raised questions about the impact on the countries' trade pact signed in January.
That came after Mr Trump on Friday unveiled a series of moves against China over Hong Kong but stopped short of imposing specific strict measures, suggesting the US prefers to avoid a confrontation at this point.EYES ON US UNREST"It seems that Friday's press conference by the president might have marked the end of the escalation between the two countries, at least for now," said Gorilla Trades strategist Ken Berman.
"That said, the issue of Hong Kong remains in the spotlight, and the conflict still has the potential to move the market in the coming weeks."Observers are keeping tabs on violent protests gripping some of the United States' biggest cities following the killing of a black man by a police officer, with Trump threatening to send soldiers into the streets.
The demonstrations have also fanned worries about a spike in Covid-19 infections, which could hamper the easing of lockdowns.Stephen Innes of AxiCorp said:"Anarchy in the streets threatens to throw a wet blanket on the risk recovery as investor optimism over economic reopening in the US could wane.
"If American consumers were reluctant to come out of their Covid-19 lockdown cocoon fearing a secondary spreader, it is unlikely they will feel any safer with military Humvees rolling down Pennsylvania Avenue. If fear is generated by anarchy in the streets, that will harm the recovery."
Still, with the mood generally positive for now, riskier assets were in demand, with the Canadian dollar and Indonesian rupiah more than one per cent up against the greenback, while the Australian and New Zealand dollars were each up around 0.9 per cent.
Oil prices also continued their march higher as the easing of lockdowns boosts hopes for demand, while key producers including Saudi Arabia and Russia ready to decide on whether or not to continue their massive output cuts that have been crucial to supporting the market.
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