Hong Kong: Asian markets were mostly in positive territory Thursday following another strong day for Wall Street as traders buy into optimism that the coronavirus crisis could be nearing its apex, while crude extended gains on hopes top producers will agree to a massive output cut.
Despite news that thousands more people had died of COVID-19 around the world, the slowing rate of news infections is providing some much-needed buoyancy to equities as investors eye an easing of lockdown restrictions that have strangled the global economy.
Hong Kong, Seoul and Singapore added more than one percent and Sydney almost two percent. Shanghai gained 0.5 percent, Taipei added 0.2 percent but there were small losses in Tokyo and Jakarta.
"Signs that the number of new daily coronavirus cases is plateauing is driving expectations that social distancing measures will be lifted soon in parts of the world," said Stephen Innes or AxiCorp. "Indeed, relaxing social distancing in the new 'risk-on' barometer." "Pretty much everywhere you look in financial markets there is renewed optimism."
The economic toll of the crisis is becoming apparent, with France now in recession after suffering its worst contraction since 1945, while European powerhouse Germany is expected to shrink by a tenth in the second quarter of the year.
Despite this, EU leaders are still struggling to agree a bailout plan to support the region, with a major sticking point being so-called "coronabonds" that would pool debt among nations.
Russia gave cause for hope Wednesday when it said it is willing to cut output by about 1.6 million barrels a day, or about 15 percent.
A key question had been whether the US would join any deal, but analysts say a fall in its crude output forecast released earlier this week is likely enough to satisfy Riyadh and Moscow for now. That is followed Friday by talks between G20 energy ministers.
Still, analysts caution that the devil will be in the detail, and an output cut deemed too small could send prices down even further.