The major Asia-Pacific stock indexes finished higher on Tuesday on the hopes of a successful reopening of the global economy as coronavirus containment measures are eased. However, gains may have been limited by simmering tensions between the U.S. and China. In other news, the Reserve Bank of Australia released interest rate and monetary policy statements.
On Tuesday, Japan’s Nikkei 225 Index settled at 22325.61, up 263.22 or +1.19%. Hong Kong’s Hang Seng Index finished at 23995.84, up 263.42 or 1.11% and South Korea’s KOSPI Index closed at 2087.19, up 22.11 or +1.07%.
China’s Shanghai Index settled at 2921.40, up 5.97 or +0.20% and Australia’s S&P/ASX 200 Index finished at 5835.10, up 15.90 or +0.27%.
World stock markets have rallied nearly 36% from March lows on hopes for a swift recovery from a pandemic that has killed nearly 375,000 people and crushed global growth as countries have shut down to try and slow the virus’s spread.
The week had begun with a surge in riskier currencies and global equities after President Trump’s response to China’s tightening grip on Hong Kong – with threats, not tariffs – was seen lowering the temperature of Sino-U.S. tension.
Worries Over Trade Deal Reduced by Encouraging PMI Data
A Bloomberg report on Monday said an order from China’s government to halt U.S. soybean purchases, though, again raised the spectre of damaging trade disagreements between Washington and Beijing. However, May Purchasing Managers Index (PMI) data in Asia, Europe and the U.S. pointed to a fragile but encouraging rebound in global manufacturing – driving hopes that the worst is over.
Reserve Bank of Australia Raises Optimism
In a statement released Tuesday announcing the Reserve Bank of Australia’s (RBA) decision to maintain its current policy settings, RBA Governor Philip Lowe said: “Over the past month, infection rates have declined in many countries and there has been some easing of restrictions on activity.”
“If this continues, a recovery in the global economy will get under way, supported by both the large fiscal packages and the significant easing in monetary policies,” Lowe said.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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