Yahoo Finance Asian Stocks Up Even Amid Dismal Data
By Gina Lee
Investing.com – Asian stocks reported modest gains on Monday morning after some countries revealed reopening plans over the weekend.
Hong Kong’s Hang Seng Index led the gains at it rose 1.91% by 10:56 PM ET (3:56 AM GMT), leading the gains.
China’s Shanghai Composite was up 0.27% while the Shenzhen Component gained 0.21% after the People’s Bank of China released its quarterly monetary policy report, pledging “more powerful” policies to counter the COVID-19 virus’ economic impact as well as more focus on growth and jobs.
But the report didn’t repeat the bank's earlier vow to “avoid excess liquidity flooding the economy”. China reported 17 new cases on May 10 and put the northeastern city of Shulan, in Jilin province, under lockdown.
South Korea’s KOSPI gained 0.16% even as the country reported 37 new COVID-19 cases, the most in a month amid fears of a second wave in the country.
“I think it’s pretty clear that if you open too fast, it’s going to have significant consequences,” Michael Yoshikami, founder and CEO of Destination Wealth Management, told CNBC.
“I think there is going to be a reckoning that people realize that we really are making a trade-off and the question that has to be asked: Is that trade off really worth it?”
Japan’s Nikkei 225 rose 1.32% after the government announced a second budget to ease COVID-19's economic impact, including aid for companies struggling to pay rent and more subsidies for those hit by slowing sales.
Japan will also remove 34 prefectures that reported no new cases from the state of emergency designation on May 14. But the designation will not be lifted yet for Tokyo and Osaka.
Down Under, the ASX 200 rose 1.26%.
Some investors were cautious of the gains as Johns Hopkins University data said that there were over 4 million COVID-19 cases globally as of May 11, and U.S. Treasury Secretary Steve Mnuchin warned overnight that jobless numbers could “get worse before they get better, adding that the U.S. unemployment rate could already have reached 25%.
“Much of the eventual improved growth and virus news is already priced into markets,” Bob Baur, chief global economist at Principal Global Investors LLC, told Bloomberg.
“Because so much future growth and uptrend potential is priced in, we expect a period of relapse and consolidation through June.”
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