Markets

Asian stocks hit three-month high

DAsian stocks climbed to an almost three-month high on Wednesday. Hopes of further economic stimulus and further easing of social restrictions around the world replaced investors’ caution about a possible second wave of coronavirus and the growing unrest in the United States. “As intense as the rally has been, this is likely to continue now that it has spread beyond the United States,” said Mazen Issa, chief foreign exchange strategist at TD Securities.

There are some signs of a recovery in business as economies start to get going again. A survey of the services sector in China, which was able to contain the March outbreak, showed a recovery to the pre-virus level in May. Nevertheless, some analysts warn that the rally is primarily driven by short-circuit reactions from speculators. “The stock markets are betting on a V-shaped recovery in July-September. But the gap between the stock market and the real economy is growing. A lot of executives now have to wonder why their company’s stocks are rising so much, ”said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

The Tokyo stock exchange was initially stronger on Wednesday, with the 225-strong Nikkei index rising 1.2 percent to 22,582 points. The broader Topix index rose 0.7 percent to 1598 points.

The stock exchange in Shanghai was up 0.5 percent. The index of the most important companies in Shanghai and Shenzhen gained 0.6 percent. The MSCI index for Asian stocks outside of Japan rose 1.4 percent.

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