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Asia-Pacific stocks rise on hopes of economic recovery

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Nikkei 225 rose 0.14%, Kospi gained 0.38%, the ASX 200 added 0.15%, Hang Seng Index advanced 1.09%, Shanghai Composite advanced 1.26% while the Shenzhen Component jumped 1.92%

Asia-Pacific stocks rose Monday morning, with investors’ focus on the global economic recovery from the pandemic and upcoming earnings.

Japan’s Nikkei 225 rose 0.14% by 2:51 AM GMT. March’s trade data, released earlier in the day, stated that exports increased 16.1% year-on-year, imports increased 5.7% year-on-year and the trade balance stood at JPY663.7 billion ($6.12 billion).

South Korea’s KOSPI gained 0.38%. In Australia, the ASX 200 added 0.15%, ahead of the Reserve Bank of Australia releasing the minutes of its latest policy meeting on Tuesday.

Hong Kong’s Hang Seng Index advanced 1.09%, even after reporting its first two cases of the mutated N501Y COVID-19 strain over the weekend.

China’s Shanghai Composite advanced 1.26% while the Shenzhen Component jumped 1.92%. Asian credit markets could get a boost from a rebound in China Huarong Asset Management Co. Ltd. bonds, after China’s financial regulator said on Friday that China Huarong had ample liquidity in its first official comments since the company missed its deadline to report earnings.

Treasury yields steadied well below recent highs in U.S. trade, after U.S. equity futures dropped as stocks ended the previous week at a record high.

Economic data released by China and the U.S. on Friday also boosted investor sentiment, with China’s GDP growing 18.3% and 0.6% year-on-year and quarter-on-quarter respectively. The U.S. will also release manufacturing and services purchasing managers indexes on Friday.

A retreat in bond yields from recent peaks has also reduced the risk of another destabilizing rise in borrowing costs.

At the global level, you have both China and the U.S. growing fast. That’s driving markets across the globe, Nasser Saidi & Associates president and founder Nasser Al-Saidi told Bloomberg.

The simultaneous rally in stocks and bonds is temporary, but it suggests confidence in continued central bank support and no fear of rapid inflation ramping up, he added.

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