The major Asia-Pacific stock indexes were up across the board on Monday, climbing toward five-month highs as investors shrugged off concerns over the rising number of coronavirus cases stateside. Meanwhile, investors continued to bet the U.S. earnings season would see most companies beat forecasts given expectations had been lowered so far by coronavirus lockdowns.
On Monday, Japan’s Nikkei 225 Index settled at 22784.74, up 493.93 or +2.22%. Hong Kong’s Hang Seng Index finished at 25772.12, up 44.71 or +0.17% and South Korea’s KOSPI closed at 2186.06, up 35.81 or +1.67%.
China’s Shanghai Index settled at 3443.29, up 59.96 or +1.77% and Australia’s S&P/ASX 200 Index finished at 5977.50, up 58.30 or +0.98%.
Investors Becoming Immune to Deterioration in Relationship between U.S. and China
The strong move upward for Chinese stocks came despite comments by U.S. President Donald Trump on Friday that the relationship between Washington and Beijing has been “severely damaged” by the coronavirus pandemic, CNBC wrote.
President Trump said he isn’t focused on a possible next phase of the U.S. trade deal with China. Trump blamed China for not stopping the spread of the coronavirus, according to reporters who were traveling with the president on Air Force One en route to Florida.
Trump said he wasn’t even thinking about “phase two” of the trade deal and that he had many other things on his mind.
US Warns Citizens of ‘Arbitrary Detention’ in China
The U.S. has asked its citizens to “exercise increased caution” in China due to a “heightened risk of arbitrary detention”- a claim slammed by Chinese state-backed media Global Times as a “blatant distortion of truth.”
The U.S. advisory was issued on Saturday and did not specify what prompted the alert.
Relations between the U.S. and China have been at their worst in decades. But the U.S. is not alone in warning its citizens of the potential risk that laws may be arbitrarily applied within Chinese territory.
Last week, Australia advised its citizens not to travel to Hong Kong, and to reconsider their need to remain in the city, due to uncertainties surrounding the new national security law there.
China’s Central Bank Sees Little Need for More Emergency Stimulus This Year
At a regular briefing with reporters on Friday, representatives of the People’s Bank of China indicated there was little need for more emergency measures that had been rolled out as COVID-19 hit business activity earlier this year.
“(We must) recognize that appropriately lowering interest rates doesn’t mean the lower, the better,” Guo Kai, deputy director of the central bank’s monetary policy department, told reporters, according to a CNBC translation of his Mandarin-language remarks.
Amid the height of the coronavirus outbreak in the first half of this year, Chinese banks loaned a record high 12.09 trillion yuan, according to central bank data.
“In the next half of the year, the economy will return to normal, and the role of traditional monetary policy may become more obvious,” Guo said at a press briefing. “We have entered a more normal state.”
For a look at all of today’s economic events, check out our economic calendar.