You are here

Asia: Markets rise as dealers focus on reopening over infections

AB_nikkei_230620.jpg
Stocks mostly rose on Tuesday as investors continue to see the positives in the reopening of economies around the world, which is offsetting worries about a second wave of infections.

[HONG KONG] Stocks mostly rose on Tuesday as investors continue to see the positives in the reopening of economies around the world, which is offsetting worries about a second wave of infections.

But the possibility of a renewed China-US trade war hurtled back into the mix after top White House economics adviser Peter Navarro said the much-vaunted pact signed in January was "over".

The easing of lockdown measures combined with trillions of dollars in government and central bank support remain the key drivers of the seemingly unstoppable march higher for equities.

And a pick-up in new cases in all continents is still unable to knock traders off their stride, as they bet on a V-shaped economic recovery.

"When you have high levels of liquidity, when you have a recovering economy, low inflation, low interest rates, you really have a strong foundation for equities to move higher," Victoria Fernandez at Crossmark Global Investments, told Bloomberg TV.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

"But there are so many uncertainties still out there that we think there's going to be some volatility before we get that upside trend on a continual basis."

In early trade, Hong Kong rose one per cent, Tokyo went into the break 0.8 per cent higher and Sydney rose 0.3 per cent.

Seoul jumped 0.7 per cent despite signs of a second wave of coronavirus in the capital, while Taipei and Jakarta were also up.

Wellington and Shanghai were both flat, while Singapore and Manila were lower.

The gains follow another record for the Nasdaq on Wall Street and came as Europe pushed ahead with the relaxation of containment measures, while New York City - at one point the centre of the US outbreak - allowed workers to head back to work.

'IT'S OVER' 

"So far, infection spikes have been localised, but concerns should continue to grow about a second wave," said AxiCorp's Stephen Innes.

"However, with renewed widespread lockdowns the most unlikely course of action, the markets seem to be just shrugging off these concerns as the lockdown-easing narrative persists."

There was an initial sell-off across the board after Mr Navarro told Fox News that the China-US trade agreement, which had provided a much-needed lift to markets at the start of the year, was no more.

When asked about the deal during a conversation about the superpowers' relationship in the wake of the virus outbreak - which Donald Trump blames Beijing for - Mr Navarro, a China hawk, replied: "It's over."

Ken Cheung, at Mizuho Bank, warned that if the comments were true, it would "imply a re-escalation of China-US tensions across the board", adding that a return to a trade war "would jeopardise the global economic recovery".

However, Mr Innes said the remarks were likely an attempt by the White House to appeal to Mr Trump's supporters as he eyes November's election against Democrat Joe Biden.

"These comments are less shocking in the political context where the betting market gives Joe Biden an 18 percentage point lead over President Trump... so perhaps the President Trump is looking to rally his hardcore base and the undecided voters where anti-China sentiment runs deep."

AFP

nnnn

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes