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Monday, January 30, 2023
Stocks & Shares

Stocks gain as China drops quarantine rule

China drops quarantine

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5%, China’s bluechip gained 0.6% and Japan’s Nikkei stock index rose 0.43%

Stock markets gained while the U.S. dollar softened on Tuesday after China said it would drop its quarantine requirements for inbound visitors, further easing three-year border controls aimed at curbing COVID-19.

China will stop requiring inbound travellers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday. It will also downgrade the seriousness of COVID-19 as it has become less virulent and will gradually evolve into a common respiratory infection.

By Tuesday morning in Hong Kong, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5%. China’s bluechip gained 0.6% and Japan’s Nikkei stock index rose 0.43%.

U.S. stock futures, the S&P 500 e-minis, inched up 0.61%, indicating the market is set to rise as traders return to their terminals on Tuesday after the Christmas holiday.

Markets in some regions including Hong Kong and Australia remain shut on Tuesday.

Chaoping Zhu, a global market strategist and JPMorgan Asset Management, said the latest policy move from China indicated economic activity in most major cities may return to normal very quickly, which is very positive for investors.

Most Chinese cities could recover from the first wave of the latest COVID-19 outbreak by January, this would be faster than people have expected, he said, adding there was concern of an outbreak lasting longer and weighing on the economy, but that developments have been in general better than expected.

He also said the reopening of China, which also entails resuming outbound visits for Chinese tourists, will lift consumer and service sectors outside of the country, particularly those in nearby Southeast Asia.

Inbound tourists had recovered 60% to 70% by November for many ASEAN countries, Zhu said, citing in-house research, but there is still a gap between now and 2019 before the pandemic.

This gap will be filled by Chinese tourists. This is the last piece of the puzzle, he said.

Oil prices ticked up on thin trade on Tuesday, on concerns that winter storms across the United States are affecting logistics and production of petroleum products and shale oil.

Brent crude was up 73 cents, or 0.9%, at $84.65 a barrel by 0122 GMT, while U.S. West Texas Intermediate crude was at $80.41 a barrel, up 85 cents, or 1.1%.

U.S. Treasuries will resume trading on Friday. The benchmark 10-year yield climbed the most last week since early April, ending around 3.75%.

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