Asian stocks close sharply higher, as China relaxes against Covid and Fed

Asian stock markets recorded robust gains on Friday (11). The fact that the Chinese government has relaxed some restrictions to contain Covid-19 has cheered investors in general.

In Tokyo and elsewhere, the prospect that the Federal Reserve (Fed, the US central bank) will tighten interest rates less, after the consumer price index (CPI) released last Thursday in the United States States, contributed to the rise.

The Shanghai Stock Exchange closed with a gain of 1.69%, at 3,087.29 points, and the smaller Shenzhen Stock Exchange, up 1.31%, at 2,017.96 points. Stocks reacted positively to news that Beijing was relaxing restrictions to contain Covid-19, including a quarantine for travelers.

Pinpoint Asset Management stated that the Chinese government “intends to move towards the reopening of the economy, although the exact timeline is not clear at this time”.

Stocks linked to consumption and the real estate sector stood out, with China Tourism Group Duty Free up 3.7%.

Among developers, Gemdale, China Vanke and Poly Developments & Holdings all hit the daily 10% upside cap, also on expectations that Beijing will ease financial pressure on the sector.

On the Tokyo Stock Exchange, the Nikkei index closed up 2.98%, at 28,263.57 points. The prospect of a less harsh tightening in the US helped.

Precision instrument makers were among the highlights, with Shimadzu up 3.8% and Hoya up 8.7%. Automaker Mazda Motor gained 7.6% and Fujifilm 11% after both companies raised earnings forecasts.

In Hong Kong, the Hang Seng index rose 7.74% to 17,325.66 points, with Beijing’s COVID-19 policy supporting robust gains.

Shares of internet-connected companies, electronics parts makers and Chinese developers were among the highlights.

In South Korea, the Kospi index closed up 3.37% in Seoul, at 2,483.16 points, with technology and internet stocks in the spotlight. The perspective of a less aggressive Fed on monetary tightening in the US was decisive on Friday for the South Korean market, with Samsung Electronics up 4.1%.

In Taiwan, the Taiex index rose 3.73% to 14,007.56 points.

Oceania

In Oceania, on the Sydney Stock Exchange, the S&P/ASX 200 index closed with a gain of 2.79%, at 7,158.00 points. Gains were widespread across sectors, with the highest global risk appetite.

Communications infrastructure provider Megaport is up nearly 14%, while investment manager Pinnacle Investment is up nearly 13%.

*With information from Dow Jones Newswires