Actions in Asia Rise as China’s Central Bank Reports Increased Support


Actions began the week in the limelight as signs of support from the Chinese central bank helped investors put aside fears that new coronavirus epidemics could undermine efforts to restart the economy ‘Mondial economy.

On Monday in Asia-Pacific, the Japanese benchmark Topix rose 1.3%, while the Hang Seng in Hong Kong and the S & P / ASX 200 in Australia rose 1.5%.

Investor sentiment was reinforced by the People’s Bank of China’s announcement this weekend that it would lower real lending rates and [the] the recovery of the real economy in a higher priority position. “

Jeffrey Halley, Senior Asia-Pacific Market Analyst at Oanda, said the PBoC decision marked his “intention to engage in more powerful policies to counter the Chinese growth slide of the Covid-19 pandemic ” This “should be enough” to prolong the recent rally in global stocks, he added.

Larger gains for regional stocks had initially extended to Chinese stocks, but in the afternoon, the CSI 300 index was down 0.5%, while Wuhan, the home center of the ‘epidemic in China, reported its first series of cases since a strict city lockout. got up about a month ago.

Futures markets indicated a 0.2% increase for the S&P 500 when Wall Street trading begins later in the day. London’s FTSE 100 is expected to increase 0.8%.

Stocks have been bolstered in recent weeks by hopes that a gradual recovery in global economic activity could fuel a broad rebound. The UK, France, Spain, Denmark and Norway should all lift certain containment measures to mitigate the economic impact of the pandemic.

This optimism has allowed investors to sweep away some of the most dismal economic readings ever recorded. On Friday, the S&P 500 rose 1.7%, even as the unemployment rate in the United States peaked at 14.7% after the war.

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However, new virus epidemics in South Korea, Germany and China have highlighted the challenges faced by governments seeking to relax social restrictions as millions of Europeans prepare for the temporary reopening of their savings.

Patrik Schowitz, global multi-asset strategist at JPMorgan Asset Management, said investors should see evidence that corporate profits had bottomed out in order to be confident that the stock markets would not recheck the lows reached in March.

“To gain confidence in a low bear market, equity investors have traditionally needed some visibility into the extent of the damage from a recession in corporate profits,” said Schowitz.

Oil prices have dropped slightly. Crude oil Brent, the international benchmark, lost 1.7% to $ 30.43 a barrel and the American marker West Texas Intermediate fell 1.9% to $ 24.27.


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