Australia markets closed

Asian Stocks Up on Back of Optimism Over Global Economic Recovery

By Gina Lee

Investing.com – Asian stocks were up on Wednesday morning, holding onto their gains from the previous session.

Down Under, the ASX 200 rose 0.86% by 10:48 PM ET (2:48 AM GMT) even after the Bureau of Statistics said that Australia’s GDP fell 0.3% during the first quarter of 2020.

Japan’s Nikkei 225 rose 1.11% and South Korea’s KOSPI gained 2.25%.

Hong Kong’s Hang Seng Index was up by 1.18%, with tensions between the U.S. and China over national security laws for both Hong Kong and Macau still simmering in the background.

Chief Executive Carrie Lam said that U.S. criticism over Hong Kong’s handling of the protests that rocked the city for six months last year was a “double standard” when compared to the U.S.’ handling of the protests over the death of George Floyd.

China’s Shanghai Composite was up 0.35% while the Shenzhen Component was up 0.29%. China's services sector returned to growth in May with a Caixin/Markit services Purchasing Managers’ Index (PMI) reading of 55.

Hopes are high on a continuous global economic recovery from COVID-19 as countries restart their economies after months-long lockdowns.

“Investor remain on an optimistic mood, squarely focused on the prospect of economies reopening supported by COVID-19 stats that broadly speaking continue to suggest reopening plans remain on track,” National Australia Bank (OTC:NABZY) analysts said in a note.

But some investors cautioned that with almost 6.4 million global COVID-19 cases and no cure yet, it was too early to be optimistic about the recovery.

Nikko Asset Management’s chief global strategist John Vail told CNBC, “We’ve been positive on the market since mid-March but certainly … all of them have shot way beyond … our targets. It does look like enthusiasm should be dialed down quite a bit for the market.”

He added that the upcoming second quarter “earnings warning season” is likely to feature “more negative ones than positive ones.”

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