Asian stocks extended their winning streak for the ninth concession session this morning as the lifting of lockdown measures across the world fuelled investor hopes of a swift global recovery from coronavirus.
MSCI’s index of Asia-Pacific shares outside of Japan notched its ninth straight session of gains this morning, marking its longest winning streak since early 2018. The index was up more than one per cent at 7AM BST, hitting a three-month peak.
It has risen 35 per cent from the four-year nadir struck in mid-March as Covid-19 secured its grip across the globe, and investors fretted over the extend of both short-term and long-term economic damage from the pandemic.
Almost all indices have now rebounded to pre-coronavirus levels.
Global equity markets were cheered last week by fresh US jobs data that showed an unexpected fall in unemployment rates from 14.7 per cent to 13.3 per cent in April. The news boosted Wall Street indices Wall Street indices surged on the news, with the Nasdaq index climbing 1.13 per cent yesterday and closing at a record level.
European stocks looked set to follow that lead this morning, with Germany’s Dax Futures index gaining 0.3 per cent and European Stoxx 50 Futures up 0.4 per cent.
“The good news is that this shows central banks’ effort to stabilise the market have worked,” said Tai Hui, chief Asia market strategist at JP Morgan Asset Management.
However, he added that the “road to recovery” was still long while the threat of a second wave of coronavirus infections cannot be ruled out yet.
Short-term gains still hang on the background of renewed trade tensions between the US and China.
That said, investors seem to be taking a glass-half-full approach to the global economy as populations around the world begin to return to the streets after months of lockdown, hinting of a boost to ailing markets.
Financial, automotive and retail and energy shares — the stocks hardest hit since the pandemic outbreak — have been leading world equity indices in recent days.
Overnight on Wall Street, the Dow Jones rose 1.7 per cent, the S&P 500 gained 1.2 per cent and the Nasdaq Composite added 1.1 per cent.
Equity strategists at Credit Suisse said that policy stimulus means economic recovery was more likely to be “V-shaped”, and faster than the “U-shaped” recovery expected by investors, suggesting more optimism for markets.
Meanwhile, Credit Suisse economists have predicted “a return to pre-virus levels of GDP by mid-2022.”