Asian shares extended their rally on Monday as investors hoped steps to unwind pandemic restrictions in China would eventually brighten the outlook for global growth and commodity demand, nudging the dollar down against the yuan.
The news helped oil prices firm as OPEC+ nations reaffirmed their output targets ahead of a European Union ban and price caps on Russian crude, which begin on Monday.
More Chinese cities announced an easing of coronavirus curbs on Sunday as Beijing tries to make its zero-COVID policy less onerous after recent unprecedented protests against restrictions.
There were also reports Beijing might lower the threat classification for COVID-19.
“While the easing of some restrictions does not equate to a wholesale shift away from the dynamic COVID zero strategy just yet, it is further evidence of a shifting approach and financial markets look to be firmly focussed on the longer term outlook over the near-term hit to activity as virus cases look set to continue,” said Taylor Nugent, an economist at NAB.
Chinese blue chips (.CSI300) gained 1.1%, on top of last week’s 2.5% bounce.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 1.2%, after rallying 3.7% last week to a three-month top. Japan’s Nikkei (.N225) edged up 0.2%, while South Korea (.KS11) gained 0.3%.