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Asia: Philippines shares hit by virus spike; Chinese stocks see eighth day of gains
[MANILA] A record 2,500-plus new coronavirus cases sent Philippine shares more than 1 per cent lower on Thursday, while other Asian emerging markets gained strength from an eighth day of gains for Chinese stocks.
The rally in Shanghai's main index, which tends to set the tone for other markets in the region, has been spurred by the large volumes of extra cash pumped through the financial system and reflects hopes the world's second-largest economy can recover quickly this year.
Those hopes also helped the yuan trade near a four-month high against the US dollar as it fell below the key 7 mark. A Reuters poll showed long positions on the yuan climb to a more than five-month high, helped by a deluge of foreign inflows.
Currencies across South-east Asia were also generally higher, with only South Korea's won flat.
With a number of countries seeing sharp spikes in Covid-19 cases, the recovery is still in question.
A fifth of the Philippines' total infections have been confirmed in the past five days and officials have warned it may have to tighten its lockdown again. Manila shares fell to a one-week low.
In line with the regional move against the US dollar, the Philippine peso advanced 0.2 per cent.
"We have two competing narratives, where the reopening optimism suggests buy, but the fear of second-wave spreaders suggests tempering one's enthusiasm," said Stephen Innes, chief global market strategist of AxiTrader.
To no immediate effect, state media in China warned of market risks on Thursday, calling on investors to pursue rational investments.
Simmering tensions between the United States and China are still high on traders' list of concerns as US elections heave into view and China's introduction of a new national security law in Hong Kong adds fuel to the fire.
On China's part, a senior diplomat said the two countries should release more "positive energy".