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Asian Shares Climb On Economic Recovery Hopes

stockmarkets aug20 25may20 lt

Asian stocks rose broadly on Monday as more signs of economies reopening around the world helped investors shrug off a flare up in U.S. China tensions.

Hong Kong markets underperformed to extend Friday's slide as thousands took to the streets of the city to protest against China's planned national security law for the city and Taiwan offered help for pro-democracy protesters who seek asylum on the island. Hong Kong's Hang Seng index recovered from an early slide to end largely unchanged.

The U.S. should give up its "wishful thinking" of changing China, Chinese Foreign Minister Wang Yi said, warning that American leaders are potentially pushing toward a new Cold War.

China's Shanghai Composite index edged up 0.15 percent to 2,817.97 after no new domestically-transmitted Covid-19 cases were reported in the country on Sunday.

On Friday, the U.S. Commerce Department added as many as 33 Chinese companies and other institutions to a U.S. economic blacklist over allegations they violated human rights and pose a threat to U.S. national security.

On Sunday, China's foreign minister said the U.S. was pushing relations between the two to "the brink of a new Cold War".

China set its daily yuan reference rate at the weakest level since 2008 as rising U.S.-China tensions drove the currency to a seven-month low.

Japanese shares posted strong gains after reports the government will lift the state of emergency in Tokyo and its surrounding regions. Also, the Nikkei newspaper reported the government is finalizing a plan for new stimulus worth almost $1 trillion to help companies ride out the coronavirus pandemic.

The Nikkei average rallied 353.49 points, or 1.73 percent, to 20,741.65, while the broader Topix index closed 1.65 percent higher at 1,502.20.

Australian markets rallied as millions of children in Australia returned to schools in the states of New South Wales and Queensland. Australian states are pressing ahead with a three-stage plan to remove most social restrictions by July.

The benchmark S&P/ASX 200 index climbed 118.60 points, or 2.16 percent, to 5,615.60, while the broader All Ordinaries index ended up 121.10 points, or 2.16 percent, at 5,729.90.

Banks ANZ, NAB and Westpac rallied 2-3 percent. IOOF Holdings advanced 2.8 percent. The wealth manager said a class action lawsuit brought against it last year on allegations of breaching disclosure requirements will be discontinued with no payments to the plaintiffs.

QBE Insurance surged 6 percent. The insurance giant said its exposure to business interruption insurance claims by customers in the U.K. will be limited to A$115 million due to reinsurance.

Energy companies Woodside Petroleum, Santos, Oil Search and Origin Energy rose 2-4 percent while mining heavyweights BHP and Rio Tinto gained over 1 percent each.

Media company Nine Entertainment Co Holdings soared 7.3 percent after the company agreed to sell its New Zealand media unit Stuff Ltd to local management in a bid to maintain ownership within the unit.

Afterpay Touch Group jumped 9 percent. The e-commerce provider said its interim chairperson Elana Rubin will take over the role permanently.

Seoul stocks gained ground as the global easing of lockdown measures raised hopes of an economic recovery.

The benchmark Kospi climbed 24.47 points, or 1.24 percent, to 1,994.60. Shares of Kakao Corp, South Korea's top mobile messenger provider, surged 8.5 percent as the Covid-19 crisis boosted demand for "contactless services".

New Zealand shares rose sharply, with the benchmark NZX-50 index ending up 113.17 points, or 1.06 percent, at 10,775.80. Oceania Healthcare rallied 3.8 percent and Z Energy advanced 3.6 percent.

Markets in India, Singapore, Malaysia and Indonesia were closed for Eid-ul-Fitr.

U.S. stocks ended mixed on Friday as rising U.S.-China tensions amid fresh turmoil in Hong Kong kept investors nervous ahead of a three-day weekend.

The Dow Jones Industrial Average edged down marginally, while the tech-heavy Nasdaq Composite rose 0.4 percent and the S&P 500 added 0.2 percent.

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