Equity indices up on upbeat China outlook

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Equity indices up on upbeat China outlook

HONG KONG: Most of the stocks went up on Monday December 5 as traders welcomed the easing of strict COVID 19 containment measures in China that have hammered the world's number-two economy.

The moves offset a forecast-busting United States jobs report that hindered hopes that the Federal Reserve will take a softer approach to hiking interest rates in its fight against inflation.

Investor sentiment has picked up considerably in the past few weeks on indications that the US central bank will slow down its monetary tightening as price rises appear to be slowing and the economy weakens.

After recent protests across the country, the Chinese leadership has taken a more pragmatic approach to fighting COVID 19 and called for more political freedoms.

The economic growth in major cities including Shanghai has been slowing down this year and sent shudders through markets because of the harsh zero-COVID strategy, which saw major cities locked down for months.

SPI Asset Management's Stephen Innes said that the move to reopening helped spur market optimism about the potential acceleration of growth in 2023 for China-sensitive assets.

China hasn't shifted away from zero-COVID policy, although there have been a number of local changes to COVID policies. They are trying to balance the expected surge in Omicron cases against the economic and social costs. The brighter outlook lifted Asian markets, with Hong Kong leading the way, jumping more than 4 per cent while Shanghai put on more than 1 per cent.

There were also gains in Taipei, Wellington, Singapore, Taipei and Manila.

London opened a little higher, though Paris and Frankfurt inched down.