Wall Street rally, Hong Kong easing Covid restrictions boost Asian stocks

The rally witnessed by Wall Street and Hong Kong going for further easing the Covid restrictions boosted most of the Asian markets on Tuesday with Hang Seng so far gaining 0.58 percent.

It follows the Dow Jones Industrial Average clawing back some of the steep losses on Monday from the previous week, as traders looked ahead to a highly anticipated Federal Reserve meeting and new inflation data.

It added 528.58 points or 1.58 percent to 34,005.04. That was its first close over 34,000 since Dec 2. The S&P 500 gained 1.43 percent to close at 3,990.56, and the Nasdaq Composite rose 1.26 percent to 11,143.74.

On Tuesday, Australia’s S&P/ASX 200 and New Zealand’s NZX 50 were up 0.17 percent and 0.82 percent respectively, while the Nikkei 225 in Japan added 0.29 percent and Singapore’s STI was up 0.76 percent.

However, the Shenzhen Component and the Shanghai Composite shed 0.69 percent and 0.09 percent in Mainland China. Similarly, Korean benchmark Kospi dropped fractionally by 0.03 percent.

Traders are bracing for the release of the US Consumer Price Index report for November and hoping for signs of easing inflation. Economists surveyed by Dow Jones expect a 0.3 percent increase on a monthly basis, which would mark a step down from October’s 0.4 percent.

Restrictions on Hong Kong travelers visiting bars or dining in at restaurants will be scrapped effective Wednesday, Chief Executive John Lee said.

Additionally, people in Hong Kong will no longer be required to use the Covid contact tracing app, LeaveHomeSafe. However, they may still need to show proof of vaccination at certain premises like eating establishments.

The amber code on international arrivals will also be removed, with Lee saying that the risk brought in by imported cases is “lower” than the risk of local infection. The red code denoting a Covid-positive patient and blue code for a negative result will still be in place.

“All people want to have less restrictions, as much as possible, while ensuring activities, [both] socially and economically, can proceed as much as possible,” Lee added.

In reaction to the positive news, Hong Kong-listed travel stocks rose, with Cathay Pacific climbing 2.94 percent, China Eastern Airlines adding 2.01 percent, and Air China up 2.62 percent.

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