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Asian stocks rise thanks to US optimism on coronavirus recovery

Markets in Shanghai, Tokyo, Hong Kong and Australia all advanced.

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A currency trader works near the screens showing the Korea Composite Stock Price Index (KOSPI) (Lee Jin-man/AP)

A currency trader works near the screens showing the Korea Composite Stock Price Index (KOSPI) (Lee Jin-man/AP)

A currency trader works near the screens showing the Korea Composite Stock Price Index (KOSPI) (Lee Jin-man/AP)

Asian stock markets rose on Monday after the chief US central banker expressed optimism the American economy might start to recover this year from the coronavirus pandemic.

Benchmarks in Shanghai, Tokyo, Hong Kong and Australia all advanced.

That came despite Japan’s announcement its economy contracted in the first quarter and the US government’s decision to step up a technology conflict with Beijing by tightening restrictions on Chinese tech giant Huawei.

Investors appear to be looking past the outbreak to a recovery despite rising infection numbers in the United States, Brazil and some other countries.

However forecasters warn the the latest market buoyancy might be premature and a return to normal could be some way off.

Market sentiment “will likely remain fragile” as investors weigh government stimulus plans against rising US-Chinese tension and poor economic data, said Riki Ogawa of Mizuho Bank in a report.

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Global coronavirus cases and deaths (PA Graphics)

Global coronavirus cases and deaths (PA Graphics)

Press Association Images

Global coronavirus cases and deaths (PA Graphics)

The Shanghai Composite Index rose 0.2% to 2,874.89 and Tokyo’s Nikkei 225 gained 0.3% to 20,105.84.

The Hang Seng in Hong Kong advanced 0.1% to 23,819.26.

The Kospi in Seoul was 0.5% higher at 1,935.73 and Australia’s S&P-ASX 200 gained 1.4% to 5,478.10.

Markets in New Zealand and Singapore also advanced.

Federal Reserve Chair Jerome Powell expressed optimism Sunday that the US economy can begin to rebound in the second half, assuming the coronavirus does not erupt in a second wave.

But he said a full recovery will not likely be possible before the arrival of a vaccine.

That appeared to encourage investors who are looking for signs of when global economies might return to normal.

Meanwhile, Japan’s government reported on Monday that the world’s third-largest economy contracted by 0.9% in the three months ending in March compared with the previous quarter.

PA