Asia stocks on track to enter bull market as China rally extends | Straits Times
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Asian stocks are close to entering a bull market as China’s reopening and a weakening US dollar lure investors back to the region.”
“The MSCI Asia Pacific Index rose 0.74 per cent on Monday as stocks from Sydney to Hong Kong rallied, making for an 18.2 per cent recovery from the index’s October 2022 trough. The Asia-wide gauge is close to entering a bull market, typically defined as when prices have risen 20 per cent or more off a recent low.”
“Gains were driven by Chinese stocks after the nation pivoted from its Covid-19 strategy and offered more policy support for the economy and developers.”
“The US dollar extended last Friday’s drop as traders bet that the United States Federal Reserve will slow rate increases with the US Institute for Supply Management’s index of services in contraction territory and wage growth slowing.”
“The South Korean won, a benchmark emerging-market risk currency, strengthened past 1,250 per dollar for the first time in six months.”
“Goldman Sachs predicts a further 15 per cent upside for the MSCI China Index. The Hang Seng China Enterprises Index, which tracks Chinese companies, rose as much as 2.5 per cent on Monday. The offshore renminbi strengthened past 6.8 per dollar for the first time since August.”
“‘Asian markets have been through a much more severe bear market than they typically tend to see and the China reopening will be more positive even for Asia ex-China markets,’ Ms Rupal Agarwal, a quantitative strategist at Sanford C. Bernstein in Singapore, said on Bloomberg TV.”
“The 2022 laggards will come back sharply in 2023, ‘so we are favouring more China, South Korea and Taiwan’, she said.” Straits Times reports.