Asian stocks extended a global stock rally on Wednesday (June 3) as investors continued to bet on a quick economic recovery from the coronavirus pandemic despite massive unrest across the United States.
Japanese shares led gains on yen weakness overnight, and stocks in Australia and South Korea also climbed.
Japan’s Nikkei index advanced 1.7 per cent, South Korea’s Kospi index climbed 2.6 per cent and Australia’s S&P/ASX 200 Index added 1 per cent.
Hong Kong’s Hang Seng rose 1.1 per cent while the Shanghai Composite index added 0.4 per cent.
Singapore’s Straits Times Index was up 2.1 per cent at 9:49am local time.
Futures on the S&P 500 Index rose 0.3 per cent as of 9:03am in Tokyo after they closed on Tuesday at their highest since early March, with energy shares rising as crude oil extended its rebound. Gunmakers extended rallies as US President Donald Trump vowed to dispatch troops if the recent social unrest isn’t contained. Treasuries were steady after Tuesday’s retreat.
On Tuesday, European shares climbed to a 12-week high as Chancellor Angela Merkel sought to thrash out a second aid package for Germany.
Global stocks are trading at a three-month high as businesses continue to reopen around the world and manufacturing gauges show economies stabilizing following coronavirus shutdowns. That’s despite a slew of risks still on the horizon, including tense US-China relations that may jeopardize a hard-won trade deal.
The sometimes-violent demonstrations across US cities over the killing by police of George Floyd, an unarmed black man, aren’t yet seen as a major drag on the economy and corporate profits. Despite the unrest, Chicago will enter the next phase of its reopening plan as scheduled on Wednesday.
“If I look at the markets, I see a V-shaped recovery,” Mark Mobius, co-founder at Mobius Capital Partners, said on Bloomberg TV. “That’s what the markets are telling us.”
Elsewhere, the Australian dollar pared gains after data showed the economy retreated on a quarterly basis in the first three months of the year.
West Texas Intermediate crude increased 2.7 per cent to US$37.82 a barrel. Brent was at US$40.37 a barrel, up 2.1 per cent.