Asian stocks are set to enter a bull market after US equities had their best day in more than a month on Friday, driven by China’s reopening trade and expectations of slower rate hikes.
The MSCI Asia Pacific Index rose 1.5% on Monday as stocks from Sydney to Hong Kong rallied, tracking a more than 2% Friday gain in the S&P 500. The Asia-wide gauge is on track to climb 20% from its October low, with the gains driven by Chinese stocks after the nation pivoted on its Covid strategy and offered more policy support for economy and developers.
The dollar extended Friday’s drop as traders bet that the Fed will slow rate hikes with the 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. China’s economic growth will quickly rebound and return to its “normal” path as Beijing provides more financial support to households and companies to help them recover after the nation ended its Covid-Zero policy, Guo Shuqing, party secretary of the People’s Bank of China, said in an interview with People’s Daily published on Sunday.
