Markets were in a bullish mood on Tuesday, due to rumours that COVID-19 restrictions may be about to end in China, due to the spread of nationwide protests that are still spreading across China.
The speculation was stoked by reports Chinese health officials would hold a news conference later on Tuesday to discuss coronavirus control measures.
The China State Council press conference on COVID-19 is due today, and much speculation and rumours are driving risk-on assets due to the media buzz on the ending of COVID zero programme.
Asian shares also rallied on Beijing’s latest move to support developers boosted the property sector. The Australian dollar and the New Zealand dollar were major beneficiaries.
Shares of Chinese property companies certainly surged after the country’s securities regulator lifted a ban on equity refinancing for listed property firms.
This also helped Chinese blue chips on the stock markets in China as they jump almost 3%, in the largest one-day rally in a month and a marked reversal of Monday’s steep falls.
The MSCI, which is basically the broadest index of Asia-Pacific shares outside Japan, followed China, and posted major gains of 1.8%, while Hong Kong’s Hang Seng climbed by nearly 4%.
I think that fear is that the market, and especially Asian markets have gotten too excited over the possibility that we could see China continue to ease up restrictions today.
The optimism towards China today combined with talk of possible output cuts by OPEC+, which started yesterday, have also helped to boost oil prices today.
So far, U.S. crude futures bounced by over 1% to $78.50 a barrel, just a day after crude oil prices hit their lowest this year on Monday, while Brent climbed $1.50 to near $89.00.
