Asia Pacific Stocks Edge Higher as Beijing Assures Investors on Coronavirus Situation

Stocks in Asia Pacific were higher in Friday afternoon trade as investors continued to monitor the situation surrounding a recent uptick in coronavirus cases in some countries.

Mainland Chinese stocks were higher by the afternoon, with the Shanghai composite up 0.39% while the Shenzhen component added 1.068%. Hong Kong’s Hang Seng index dipped fractionally.

Japan’s Nikkei 225 gained 0.72% while the Topix index nudged 0.23% higher. Over in South Korea, the Kospi traded slightly higher. Shares in Australia saw gains, with the S&P/ASX 200 up 0.75%. Overall, the MSCI Asia ex-Japan index rose 0.19%.

Investor focus on Friday likely remained on developments surrounding the resurgence of coronavirus in some places, with four states in the U.S. reporting record spikes in cases.

Meanwhile, a Chinese health expert said Thursday that a recent virus outbreak in Beijing is under control. The Chinese capital saw a jump in infections after more than 50 days without domestically transmitted Covid-19 cases.

“The epidemic in Beijing has been brought under control,” Wu Zunyou, the chief epidemiologist of the Chinese Center for Disease Control and Prevention, said according to a Reuters translation. “When I say that it’s under control, that doesn’t mean the number of cases will turn zero tomorrow or the day after.”

“Despite an unrelenting climb in COVID infections across (Latin America), South Asia and second wave risks hanging over US and China, global markets have regained traction; optimism even,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note. “Simply put, markets view pandemic risks as passé, relegating them to the backseat (and rear-view mirror) as they look for an upturn ahead.”

“Markets’ resilience is best explained by the ‘hall of mirrors’ belief; where bets are that the Fed be cornered into easing effusively for the fear of disappointing markets,” Varathan said, in reference to unprecedented measures taken by the U.S. central bank to support financial markets.

On the economic data front, Australia’s preliminary retail trade figures released Friday by the country’s Bureau of Statistics showed retail turnover rising 16.3% in May on a seasonally adjusted basis.

“This is the largest seasonally adjusted rise ever published in the 38 years of the Retail Trade survey, following the largest ever seasonally adjusted fall of 17.7 per cent in April 2020. Turnover rose 5.3 per cent when compared to May 2019,” the Australian Bureau of Statistics said in a media release.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.395 after rising from levels below 97.2 earlier.

The Japanese yen traded at 106.86 per dollar after seeing touching levels around 107.1 yesterday. The Australian dollar changed hands at $0.6859 after declining from levels above $0.688 yesterday.

Oil prices advanced in the afternoon of Asian trading hours, with international benchmark Brent crude futures 0.96% higher at $41.91 per barrel. U.S. crude futures also rose 1.08% to $39.26 per barrel.

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