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Shanghai soars more than 5% as ‘bull sentiment’ drives markets

Stocks in Asia Pacific were higher during Monday’s trading session. Shares in mainland China led regional gains.

The Shanghai composite soared 5.34% while the Shenzhen component rose 3.717%. The Shenzhen composite also jumped 3.6%.

Jackson Wong, asset management director at Amber Hill Capital, told CNBC in an email that “bull sentiment” in mainland Chinese shares was “driving the markets.”

Wong said the “sudden surge” in trading volume, as well as a break out for the Shanghai composite last week, raised investor expectations that “another bull run is coming.” Some of the reasons he suggested for the uptick in sentiment included the country being less affected by the coronavirus outbreak at the moment.

BOCOM International’s Hao Hong told CNBC that the Shanghai composite has “broken through” its 850-day long-term moving average.

“The market continues to believe that the central bank will ease more, as seen by China’s recent credit and monetary expansion,” said Hong, who is managing director and head of research at the firm. However, he added: “In China, the bull comes as swiftly as it leaves.”

Hong Kong’s Hang Seng index also saw robust gains and rose 3.34%.

Elsewhere in the region, the Nikkei 225 in Japan rose 1.83% while the Topix index added 1.6%. South Korea’s Kospi advanced 1.64%.

Meanwhile, shares in Australia bucked the regional trend and edged lower, with the S&P/ASX 200 dipping 0.42%.

Overall, the MSCI Asia ex-Japan index jumped 1.6%.

The moves upward regionally came despite the World Health Organization saying Saturday that more than 200,000 coronavirus cases were confirmed over a 24-hour period — a record.

Over in the U.S., the states of Florida and Texas reported daily record spikes in coronavirus cases on Saturday. The recent surge in cases has raised concerns over the possibility of lockdowns being reintroduced to curb the virus’ spread, that could put a dent on the prospects for economic recovery.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.896 after touching an earlier high of 97.195.

The Japanese yen traded at 107.68 per dollar after strengthening from levels above 108 against the greenback last week. The Australian dollar changed hands at $0.6968 following a rise from levels around $0.684 in the previous trading week.

Oil prices were mixed in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 0.93% to $43.20 per barrel. U.S. crude futures, on the other hand, shed 0.15% to $40.59 per barrel.

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2020-07-06 06:24:03

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