Asian stock markets rose for the third straight session as investors cheered countries’ moves to reopen their economies and China’s services sector returned to growth.
Japan’s Nikkei 225 climbed 1.2 per cent while Hong Kong’s Hang Seng moved 1.2 per cent higher. China’s CSI 300 index rose 0.5 per cent as Asian stock markets approached three-month highs.
Investor sentiment continued to be lifted by the lifting of coronavirus lockdowns around the world. Europe is gradually easing its restrictions, which Asian markets hope will boost global demand.
On top of this, a survey showed that China’s services sector returned to growth in May for the first time since January.
The Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 55.0 in May from 44.4 in April, hitting the highest level since late 2010.
“It appears that China no longer is facing a lingering threat of mini-virus clusters escalating uncontrollably, as the authorities have been quick to mass test and tamp down on potential hotspots,” said Miguel Chanco, senior Asia economist at Pantheon Macroeconomics.
Sentiment has also been lifted by expectations that the European Central Bank (ECB) will ramp up its stimulus measures when it meets tomorrow. Analysts expect the Bank to add to its quantitative easing bond-buying programme.
The US Federal Reserve could also add to its stimulus programmes when it meets next week.
Jim Reid of Deutsche Bank said: “Our European economists here at DB are expecting that they’ll be announcing a doubling of the pandemic emergency purchase programme (PEPP) to €1.5tn and extend the minimum net asset purchase period until mid-2021.”
MSCI’s index of world stocks rose 0.2 per cent. That took it to a three-month high, reflecting the remarkable rally in stocks over the last two months.
The dollar fell 0.3 per cent on an index against other currencies. Investors have rotated out of the safe-haven currency in favour of equities in recent weeks.