Asia shares jump on Chinese trade data, pandemic still a worry

[NEW YORK] Asian stocks extended gains on Tuesday after China's trade data came in better than expected and as some countries tried to restart their economy by partly lifting restrictions aimed at curbing the coronavirus outbreak.

Analysts said some of the tail risks that had threatened a much deeper and prolonged downturn were starting to dissipate thanks to a slowdown in new coronavirus cases in major economies and a raft of monetary and fiscal stimulus globally.

Also boosting sentiment was data showing China's exports in March fell only 6.6 per cent from the same period a year earlier, a smaller drop than the expected 14 per cent plunge. Imports eased a modest 0.9 per cent compared with expectations for a 9.5 per cent drop.

Chinese shares strengthened on Tuesday with the blue-chip index up 0.9 per cent. Australian shares were up 1.1 per cent while Japan's Nikkei gained 2.2 per cent.

Hong Kong's Hang Seng rose 0.6 per cent.

That left MSCI's broadest index of Asia-Pacific shares excluding Japan rallying over 1 per cent.

E-Mini futures for the S&P 500 jumped 1.2 per cent.

It was still too soon to say the worst was over for financial markets.

"While a couple of tail risks appear to be moderating, markets are not out of danger as the impending activity and earnings growth hole in the global economy appears to be larger than we first thought," Perpetual analyst Matthew Sherwood wrote in a note.

"In the absence of Covid-19 vaccine we seriously question how much of the economy can re-open without threatening flare-ups in virus case numbers."

In Europe, thousands of shops across Austria were set to reopen on Tuesday while Spain let some businesses get back to work on Monday though shops, bars and public spaces were set to stay closed until at least April 26.

In the United States, which has recorded the highest number of casualties from the virus in the world, President Donald Trump said on Monday his administration was close to completing a plan to re-open the US economy.

However, some state governors have signalled that the decision on when to restart businesses lay with them.

Wall Street indexes ended mixed on Monday with the Dow and S&P 500 falling while a 6.2 per cent gain in Amazon shares helped the Nasdaq end higher.

Elsewhere, Britain's finance minister told colleagues the UK economy could shrink by up to 30 per cent this quarter due to the coronavirus lockdown that has shuttered businesses.

In a sign of worries about struggling global demand, oil prices barely reacted to a global deal to cut output by a record amount of nearly 10 per cent of world supply. US crude was up just 27 US cents at US$22.68 (S$32), well under its January peak of US$63.27.

Brent crude gained 51 cents to US$32.25 a barrel.

Skittish market sentiment helped gold prices cling to highs not seen in more than seven years at US$1,720.1 an ounce.

In currencies, the dollar continued to extend losses on the back of the US Federal Reserve's massive new lending programme. The greenback was a touch weaker against the Japanese yen at 107.62. The euro was up 0.3 per cent at US$1.0945. The risk-sensitive Australian dollar jumped 0.6 per cent to US$0.6420.

REUTERS