A FURTHER easing of lockdown measures across the planet continued to push equities higher in Asia today, with the reopening of bars, cafes, pools and beaches overshadowing China-US tensions.

Hong Kong was among the big gainers as the Hang Seng ate away at a loss of more than 5% suffered on Friday after China proposed a security law for the city that has many fearing for the future of the financial hub.

While some countries such as Brazil and Russia are still suffering with rising death and infection tolls, an increasing number of governments are seeing their figures tail off enough to attempt to get societies back to some form of normal.

“The positive take on the mobility data suggests fear about the coronavirus is ebbing,” said Stephen Innes of AxiCorp.

“Government support during lockdowns has given many people income to spend. If anxiety is not too significant, they will rush out to malls.

“Ultimately, the consumer will need to do the bulk of the heavy-lifting so confidence to get out of the house and start to live a normal life… will be critical to this recovery.”

Adding to the broadly positive outlook is optimism about progress on a vaccine, which would allow the shattered global economy to start bouncing back.

But Chris Iggo, at AXA Investment Managers, added: “That does not mean we should ignore the risk of second waves, prolonged weak growth and geopolitical issues.”

Tokyo ended the morning more than 2% higher, while Sydney, Seoul, Taipei and Wellington all climbed more than 1%.

Singapore also put on more than 1% on hopes for fresh stimulus measures by the city-state as the government warned the economy could shrink as much as 7% this year. Shanghai and Jakarta each added 0.8%.

Oil builds on rally

Hong Kong jumped more than 2%, with analysts saying investors took some heart from comments by China’s point man in the city, in which he said the proposed new security law would not affect the financial hub’s judiciary, autonomy and cherished “one country, two systems” policy.

Beijing’s decision to push the law on Friday sent the Hang Seng tumbling more than 5% and ramped up already high tensions with Donald Trump, who has continually hit out at China for its role in the spread of the coronavirus.

But National Australia Bank’s Rodrigo Catril said that while their standoff is simmering, “equity investors appear more interested in the prospect of economies reopening around the globe”.

Crude markets pushed on with their recovery, having suffered a spectacularly bad April, when WTI crashed below zero.

The reopening of economies and a massive cut in output by some of the world’s top producers has helped the US benchmark virtually double in value this month.

“The market is starting to witness the effect of output cuts along with a reduction in inventories, while the global economy is on its path to recovery,” Will Sungchil Yun, of VI Investment Corp, told Bloomberg News.

“Still, there’s caution with the absence of a cure for the pandemic as well as the possibility of a second wave of infections.” – AFP, May 26, 2020.