June 29, 2022


Declining worries about the impact of the Omicron variant and easing Chinese bank monetary policy leads Asian shares to advance on Tuesday.

On Monday, the People’s Bank of China announced that it would cut the amount of cash that banks must hold in reserve. This is the central bank’s second time releasing the funds in long-term liquidity to bolster slowing economic growth.

According to global market strategist, Asia Pacific, ex-Japan, at Invesco, David Chao, with the recent cut policymakers in the country are demonstrating a more forceful approach to prevent an all-out property market collapse.

Stock market summary –

• The MSCI’s broadest index of Asia-Pacific shares outside Japan traded high at 1.3% in two months, after declining on Monday to the lowest level in one year.
• During early trading hours, Euro Stoxx 50 futures rose 0.5% and FTSE futures put on 0.08%.
• As China’s central bank freed up $188 billion in liquidity through a policy easing, China’s CSI300 index gained 0.6% and Hong Kong’s Hang Seng Index advanced 1.7%.
• Elsewhere, Australia’s S&P/ASX200 rose 0.95%.
• Japan’s Nikkei index rose 2.1% over risk-on sentiment pushing markets higher.
• MSCI’s main Asia ex-Japan benchmark so far this year has lost about 5%, with Hong Kong markets figuring among the big losers, while Indian and Taiwanese stocks outdid.
• Embattled developer, China Evergrande Group shares traded up 1.7% after hitting a record low on Monday.
• Market investors wait to see if the real estate giant has paid $82.5 million with a 30-day grace period coming to an end.
• As concerns about the impact of the Omicron variant on global fuel demand eased, oil prices traded higher, consolidating a nearly 5% rebound the day before.
• Brent crude futures after settling 4.6% higher on Monday strengthened by 0.9% to $73.7 a barrel on Tuesday trading.
• Investors’ expectations on U.S. consumer price data due later this week that may show inflation quickening led gold prices to trade steady at $1,778.5 per ounce.

Elsewhere, markets were supported by gains on Wall Street, where economically sensitive stocks outperformed.

Mizuho Bank head of economics and strategy, Vishnu Varathan, commented that while epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably deduced that last week’s brutal sell-off ought to have been milder.