Markets have been particularly encouraged by a May US jobs report last week that showed a surprise fall in the unemployment rate, sending Wall Street indices surging with the Nasdaq .IXIC hitting a record close on Monday. Global financial markets were battered in March as investors fretted over extent of both the short and longer term damage to the world economy from the coronavirus pandemic. But most indices are now back to pre-COVID-19 levels. MSCI’s broadest index of Asia-Pacific shares outside of Japan .MIAPJ0000PUS rose for a ninth straight session for its longest winning streak since early 2018. It was last up 0.76 percent at a three-month peak. Australia’s S&P/ASX 200 jumped 2.5 percent while Chinese shares started on a firm footing with the blue-chip CSI300 index .CSI300 rising 0.4 percent. Hong Kong’s Hang Seng index .HSI climbed 1.2 percent.
Japan’s Nikkei .N225 bucked the trend to be down 0.5 percent..
“The good news is that this shows central banks’ effort to stabilise the market have worked,” said Tai Hui, Chief Asia Market Strategist at J.P. Morgan Asset Management.
“The current risk rally is driven by investors’ belief that the worst of this recession is behind us, which we agree with. Yet, investors need to be mindful of the potential risks ahead.”
Tai said the “road to recovery” was still long while the threat of a second wave of coronavirus infections cannot be ruled out yet.
It comes as economic downturn in the US due to the pandemic has been officially declared a recession, according to the National Bureau of Economic Research.
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8.37am update: FTSE 100 responds to British American Tobacco losses
London’s FTSE 100 index was opened lower on Tuesday due to losses in British American Tobacco, after the company cut its annual profit and revenue forecasts.
The cigarette maker fell 2.8 percent after it flagged a demand hit due to prolonged lockdowns in South Africa and Mexico and weak sales in countries including Bangladesh and Vietnam.
The blue-chip FTSE 100 was down 0.4 percent and the mid-cap FTSE 250 fell 0.2 percent.
8am update: FTSE 100 opens lower
The FTSE-100 index opened at 6472.59.
7.38am update: Holiday rentals firm agree to give customer refunds for coronavirus cancellations
The holiday rentals firm behind Hoseasons and Cottages.com has agreed to give customers refunds for cancelled trips due to the coronavirus crisis after a probe by the competition watchdog.
The Competition and Markets Authority (CMA) said Vacation Rentals had changed its policy after originally refusing to give money back to customers whose stays had been cancelled.
Vacation Rentals has now given the CMA a formal commitment that it will give affected customers the option of a full refund.
6.27am update: Hong Kong hedge funds seek exit as national security law approaches
Fund managers and traders in Hong Kong are said to be concerned that the industry could clash with China, after the Chinese Communist party approved a plan to impose national security laws targeted at what it called “subversion of state power”.
Speaking to the FT, an adviser who works with hedge funds in the city and elsewhere in the region said: “It will become just another city in China. The hedge fund community will move on to Singapore and elsewhere.”
More than 420 funds are based in the city, according to data from research firm Eurekahedge.
Funds in Hong Kong manage assets are worth almost $91bn, more than is managed in Singapore, Japan and Australia altogether.
Additional reporting by Rachel Russell