©Reuters.
Investing.com – Most Asian currencies and stocks moved higher on Tuesday in a short week due to the holiday season following China’s recent decisions to ease coronavirus restrictions.
The Shanghai index rose 1%, or the equivalent of 30 points, and the Senex index rose 0.7%, or the equivalent of 400 points. While the Singapore index rose 0.3%, or the equivalent of 9 points, the Shenzhen composite index closed 0.88% to 1993 points and the CSI300 rose 1.15% to 3887 points.
E 225 rose in the range of 0.2%, or the equivalent of 42 points, and the Asian index rose 0.1%, or the equivalent of 3.1 points, to levels of 3253 points.
As the dollar fell, the South Korean won jumped to a six-month high and Chinese stocks soared after the country said it would ease some quarantine rules.
what happened?
China, Asia’s largest economy, said it would stop requiring inbound travelers to enter quarantine from January 8.
Chinese authorities added they would scale back their COVID-19 management policy as the disease becomes less virulent, raising hopes for faster economic growth.
Beijing has borne the brunt of harsh coronavirus restrictions since the outbreak of the pandemic in 2020, as economic activity has taken a hit and global supply chains have been disrupted by frequent lockdowns.
Final point
“We have seen a rally in Asian currencies as China reopens,” said Moh Seong Sim, a foreign exchange analyst at Bank of Singapore.
He added: “We are getting more clarity on the end point in terms of reopening and I think we are moving in the right direction in the medium term.”
However, it trimmed early gains after data showed profits of Chinese industrial firms contracted further in January-November due to tight COVID-19-related restrictions.
By contrast, China’s 2021 GDP growth data rose, showing the size of the economy was about $80 billion larger than previously estimated.
According to data from the National Bureau of Statistics on Tuesday, gross domestic product (GDP) amounted to 114.9 trillion yuan ($16.5 trillion) in 2021, about 556.7 billion yuan more than the previous estimate.
Asian currencies
Other Asian currencies rose during the day, with the Singapore dollar, Thai baht, Taiwan dollar and Malaysian ringgit all ranging between 0.3% and 0.7%.
The Singapore dollar is the only Asian currency to post gains this year, while most of its peers are down more than 5% so far this year.
However, it is heading for its lowest level since last June, falling below 104 levels, down 0.4% against a basket of major currencies.
Meanwhile, many Asian stocks were in the black, with Chinese equities higher as were markets in Thailand and Singapore.
Gold and oil
Spot gold contracts moved higher in the US dollar during these trading moments on Tuesday to levels near $1810 an ounce, an increase of about $10, or the equivalent of 0.65%.
And it surged during these trading moments today, Tuesday, in the range of $14 an ounce, reaching levels near $1818 an ounce, or the equivalent of 0.7%.
The American rose during today’s trading by 0.7%, reaching levels close to 81 dollars a barrel, with gains around 0.8 dollars.
The benchmark soared to a record high of $85 a barrel, an increase of 0.8%, or the equivalent of $0.9 a barrel, to reach levels of $85.39 at the moment.
Optimism about the lifting of coronavirus restrictions and freedom from the zero Covid policy being pursued by Chinese authorities bolsters optimism about improving demand from the world’s second-largest economy for commodities like oil and gold.
easing of restrictions
And China has decided not to subject inbound travelers to quarantine starting January 8, paving the way for the country to emerge from the global isolation caused by the strict restrictions imposed to deal with the epidemic, which have damaged the second largest economy world.
The National Health Commission said only people arriving in China will have to show a negative test result for the “Covid-19” virus, conducted 48 hours before their arrival.
This compares with the current eight-day isolation requirement, which includes five days in a quarantine hotel or central facility followed by three days at home.
China plans to ease visa applications for foreigners to travel to China and will lift existing restrictions on the number of international flights between China and the rest of the world.
China’s National Health Commission said it would continue to monitor the spread of the virus, promising to take appropriate measures to suppress the peak of the epidemic and step up treatment for seriously ill patients.
