Asian stocks close higher after Beijing eases Covid-19 restrictions

Asian stock markets closed higher on Monday (5), with emphasis on China’s stock indices, once again driven by further relaxation of restrictions against Covid-19 in the country over the weekend.

The Shanghai Composite index closed up 1.76%, at 3,211.81 points, while the less comprehensive Shenzhen Composite advanced 0.88%, at 2,062.63 points.

Hong Kong’s Hang Seng ended the trading session up 4.51% to 19,518.29 points, supported mainly by gains of 9.3% in its technology sub-index.

Another highlight, real estate stocks also fell sharply, with Country Garden Holdings (+18.06%) among the best performers of the day.

The capital Beijing and the metropolis Shenzhen were among the cities that received a new round of easing of the rules imposed against Covid-19 in China.

Starting this week, negative tests will no longer be required to use public transport. The country has been relaxing its measures since last week, after days of protests against the Xi Jinping government’s covid-zero policy.

“If these changes are observed in other Chinese cities, it should increase market optimism this week”, ponders Danske Bank.

Beijing’s anti-Covid rules have put pressure on the country’s economy, as can be seen in the November composite purchasing managers’ index (PMI), which fell to 47.0, with a drop to 46.7 in the services sector alone.

Japan’s services PMI also retreated in November, but to a level above 50 points, which separates contraction from activity expansion.

There, the Tokyo stock exchange closed at a slight increase of 0.15%, to 27,820.40 points, while the South Korean Kospi index contradicted the general movement by retreating 0.62%, to 2,419.32 points.

Among other markets, Taiwan’s Taiex gained a modest 0.07% to 14,980.74 points and the Australian S&P/ASX 200 rose 0.33% to 7,325.60 points.