By Kane Wu
HONG KONG, Nov 30 (Reuters) – Asian stocks rebounded on Wednesday as investors pinned hopes that China will finally reopen its economy despite growing COVID lockdowns that have pushed its activity in factories and the service sector higher. deep in contraction.
Europe and Wall Street were also expected to open higher with FTSE futures and E-mini futures for the S&P 500 index up 0.35% and 0.15%, respectively, at 0518 GMT.
MSCI’s broadest gauge of Asia-Pacific stocks outside of Japan reversed morning losses to gain 0.67%. At current levels, the index is expected to post its largest monthly increase since April 1999.
Hong Kong’s Hang Seng Index and China’s benchmark CSI300 also rebounded, rising 0.82% and 0.1% respectively, as investors largely ignored an official survey that showed Chinese factory activity contracted at a faster rate than expected in November.
“Investors are looking beyond what happened in November. The impact on the economy of recent measures to support the real economy, including the real estate sector in China, will gradually emerge,” said Redmond Wong, Greater China market strategist at Saxo Markets in Hong Kong.
“Despite the spike in cases and recent protests, China has not toughened its COVID approach and continues to refine its policy, which is encouraging for investors.”
Chinese officials said on Tuesday the country would speed up COVID-19 vaccinations for the elderly.
The vaccination drive was seen as crucial to lifting nearly three years of tough restrictions in the world’s second-largest economy that have eroded economic growth, disrupted the lives of millions and sparked unprecedented protests over the weekend.
Most analysts, however, say the reopening will be slow and bumpy, weighing heavily on the economy through 2023.
“Headlines out of China regarding COVID-related restrictions and protests are causing concern among investors. Although some COVID easing measures are being considered, this may not be enough to prevent further economic disruption,” he said. However, warned Anderson Alves, global macroeconomic analyst at ActivTrades, on Wednesday. research note.
The Japanese Nikkei 225 fell 0.41% while the Australian S&P/ASX 200 closed up 0.35%.
Globally, investors are awaiting guidance on the US Federal Reserve’s interest rate hike path.
Fed Chairman Jerome Powell is scheduled to speak on the economy and labor market at a Brookings Institution event on Wednesday. A series of US manufacturing, inflation and employment data will also be released this week.
“This week will provide an interesting test for the markets as we examine the next major macro data points out of the US, particularly the PCE inflation data and the Friday November jobs report,” he said. Wong of Saxo Markets.
The US ISM manufacturing survey for Thursday is also expected to contract, Wong said.
Oil prices posted gains of more than 1% in Asian trade on Wednesday on lower U.S. crude inventories and a weaker greenback, but OPEC+ concerns will leave output unchanged at its next meeting and weak Chinese data limited gains.
Brent crude futures rose 1.05% to $83.90 a barrel at 0533 GMT, while US crude futures rose 1.14% to $79.09 a barrel.
Spot gold rose 0.25%.
In the foreign exchange markets, the dollar index fell by 0.27%. (Reporting by Kane Wu; Editing by Tom Hogue and Lincoln Feast.)
