Asia report: Markets rise as China starts lifting Covid rules

Stock markets in Asia were in the green on Monday, as investors looked ahead to a busy week for economic data and after authorities in China started to lift some of the strictest Covid-19 restrictions.

In Japan, the Nikkei 225 was up 2.19% at 27,369.43, as the yen weakened 0.13% against the dollar to last trade at JPY 127.27.

It was a day of surges for the benchmark’s major components, with automation specialist Fanuc up 4.66%, fashion firm Fast Retailing rising 3.27%, and technology conglomerate SoftBank Group 0.32% firmer.

The broader Topix index was 1.86% firmer by the end of trading in Tokyo, settling at 1,922.44.

On the mainland, the Shanghai Composite was 0.6% higher at 3,149.06, while the technology-heavy Shenzhen Component jumped 1.04% to 11,310.28.

Sentiment in China was given a boost over the weekend, after some of the strict Covid-19 rules in Beijing and Shanghai were relaxed.

Local authorities in Shanghai said businesses could reopen without seeking special permission from Wednesday, while in Beijing, shopping centres began to resume trading on Sunday.

It came as the latest official data showed 20 new symptomatic cases in mainland China on Sunday, down from 54 on Saturday.

“Asian markets added to the positive momentum as China began to ease lockdown restrictions in both Beijing and Shanghai,” said Interactive Investor head of markets Richard Hunter.

“The premier has announced that there will be a range of measures aimed at boosting a beleaguered economy, with more detail to follow shortly.”

Hunter said the damage had already largely been done over recent months, with an “inevitable drop” in consumer sentiment tied to a soaring unemployment rate, and with many economists predicting a contraction in the current quarter.

“Even so, a perceived improvement to the fractious US-China relationship has also improved sentiment, particularly given the limitations which global economies have had to endure this year.”

South Korea’s Kospi advanced 1.2% to 2,669.66, while the Hang Seng Index in Hong Kong was 2.06% firmer at 21,123.93.

The blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 1.8% and SK Hynix ahead 0.94%.

Oil prices were higher at the end of the Asian day, with Brent crude futures last up 0.28% on ICE at $119.77 per barrel, and the NYMEX quote for West Texas Intermediate 0.3% firmer at $115.41.

In Australia, the S&P/ASX 200 added 1.45% to 7,286.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.73% higher at 11,145.50.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.34% at AUD 1.3916, and the Kiwi advancing 0.17% to NZD 1.5273.

Reporting by Josh White at Sharecast.com.