Asia report: Stocks pop on easing of China quarantine rules

Stock markets in Asia joined the global surge on Friday, with Hong Kong’s main board jumping more than 7% after authorities in China cut down quarantine requirements for Covid-19.

In Japan, the Nikkei 225 was up 2.98% at 28,263.57, as the yen strengthened 0.88% on the dollar to last trade at JPY 139.74.

Automation specialist Fanuc was up 4.93%, fashion firm Fast Retailing added 1.96%, and technology conglomerate SoftBank Group was 1.76% firmer.

SoftBank’s gains came on the back of a forecast-busting second-quarter profit of JPY 3.03trn.

Analysts had pencilled in a profit of JPY 2.77trn for the three months through September, after the company reported two consecutive quarters in the red.

The broader Topix index ended the session 2.12% firmer, settling at 1,977.76.

On the mainland, the Shanghai Composite was ahead 1.69% at 3,087.29, and the technology-heavy Shenzhen Component was 2.12% higher at 11,139.77.

State media reported earlier in the day that authorities in Beijing had decided to trim two days from the required quarantine time for inbound overseas travellers, in the first sign of an easing of pandemic restrictions.

The new rules will see travellers staying at a quarantine facility for five days, followed by three days of observation at home.

South Korea’s Kospi jumped 3.37% to 2,483.16, while the Hang Seng Index in Hong Kong surged 7.74% to 17,325.66.

Travel and leisure plays were among the leaders in the special administrative region amid the reports of China’s easing of Covid restrictions.

Among airlines, Air China was up 2.38%, Cathay Pacific Airways added 2.34%, China Eastern Airlines ascended 5.07%, and China Southern Airlines was 3.39% higher.

Macau-based gambling operators were also in the green, with Galaxy Entertainment Group up 8.28%, MGM China ahead 8.41%, Sands China 11.55% higher, and Wynn Macau growing 9.41%.

Seoul’s blue-chip technology stocks were on the front foot as well, with Samsung Electronics up 4.14% and SK Hynix rising 4.94%.

“The euphoria spread to Asian markets overnight, with the broadest index spiking by over 5%,” said Interactive Investor head of markets Richard Hunter.

“Again, this rise will lead to a positive week for the index, but nonetheless make little inroads in the year to date drop of 23%.

“Even so, sentiment was further boosted by an announcement from the Chinese authorities that some Covid-19 curbs would be eased, such as quarantine times for inbound travellers.

“The Chinese market has had a particularly turbulent time of late, with waning consumer confidence, a troubled property sector and tepid economic growth all contributing to a difficult immediate outlook.”

Oil prices were higher as the region entered the weekend, with Brent crude futures last up 3.12% on ICE at $96.59 per barrel, and the NYMEX quote for West Texas Intermediate rising 3.47% to $89.47.

In Australia, the S&P/ASX 200 was 2.79% higher at 7,158.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 added 1.98% to 11,311.76.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.78% to AUD 1.4991, and the Kiwi advancing 0.32% to NZD 1.6544.

Reporting by Josh White for Sharecast.com.