Coronavirus News Asia

Investors tiptoe back on economic hopes

Investors are slowly incorporating risk amid reports of economies across the world opening up despite poor data, showing severe economic damage from the coronavirus pandemic.

In the United States, governors in some states like California and New York have gradually allowed some relaxation for economic activity as hospital numbers and new deaths decline. In Asia, Hong Kong and Australia have also allowed eased some restrictions, prompting expectation of economies starting up again.

The Hong Kong benchmark, the Hang Seng index, rose 0.6% and Australia’s S&P/ASX 200 added 0.88%, riding the extended rally in oil prices with eyes on the Reserve Bank of Australia’s policy decision later in the day. Japan and China are shut for holidays on Tuesday.

“The Australian Covid-19 outbreak is also proceeding in an encouraging direction, with very low daily case numbers, and movement restrictions eased. Prospects of a slow recovery ahead are gaining ground thanks also to some very supportive fiscal policy,” said Robert Carnell, ING Bank’s Regional Head of Research in Asia-Pacific. He did not expect any change in the RBA’s monetary policy.

“This is not the time to change policy, with the whole world economy on its knees and continued scope for possible second waves, so this meeting will be mainly about RBA growth projections,” Carnell said.

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