Stocks gain in Asia after China eases further COVID rules

Shares rose in Asia on Tuesday after China announced it would further ease its pandemic restrictions despite widespread outbreaks of COVID-19 straining its medical systems and disrupting business.

China’s National Health Commission said Monday that passengers arriving from abroad will no longer be required to quarantine from January. 8. They still require a negative virus test within 48 hours of their departure and must wear masks on their flights.

But it was the latest move to ditch the once-tight virus control measures that have severely restricted travel to and from the world No. 1. 2 economy.

China has joined other countries in handling cases rather than trying to stamp out infections, dropping or relaxing rules on testing, quarantines and movement to reverse an economic slump. But the shift has inundated hospitals with feverish, wheezing patients, and authorities are going door-to-door paying people over 60 to get vaccinated against COVID-19.

The Shanghai Composite Index rose 0.8% to 3,089.39. Markets in Hong Kong were closed for a public holiday, as were those in Australia.

Tokyo’s Nikkei 225 rose 0.3% to 26,476.27 and Seoul’s Kospi also rose 0.3% to 2,323.52.

In Bangkok, the SET index rose 0.6%, while in Mumbai the Sensex rose 1.2%.

Markets in the US and Europe were closed for public holidays on Monday and Asian markets were mostly higher.

On Friday, the S&P 500 closed 0.6% higher. It’s down 19.3% for the year and is on the verge of a bear market.

The Dow Jones Industrial Average rose 0.5%, while the tech-heavy Nasdaq was up 0.2%. The Russell 2000 Index rose 0.4%.

Solid US consumer spending and a strong labor market have kept the economy growing, but they also raise the risk that the Federal Reserve will have to keep raising interest rates and keeping them high to dampen inflation.

After last week’s updates, the last major reports of the year, investors will be on the lookout for corporate earnings that could shed some light on how the economy is faring.

The pace of inflation has slowed, but the Fed has said it will raise rates further to tame inflation. Its key overnight rate is at a 15-year high after starting the year at a record low of near zero. The benchmark interest rate, the federal funds rate, is in a 4.25% to 4.5% range, and Fed policymakers have forecast that they will and will not hit a 5% to 5.25% range by the end of 2023 will be reduced before 2024.

Higher interest rates pose a risk that the economy could falter and slide into recession in 2023. They have also weighed heavily on the prices of stocks and other investments.

On the other day of trading, US benchmark crude rose 31 cents to $79.87 a barrel in electronic trading on the New York Mercantile Exchange. It gained $2.07 to $79.56 before markets closed for the long Christmas weekend holiday.

Brent crude, the price basis for international trade, was also up 31 cents to $84.81 a barrel.

In forex trading, the US dollar rose to 132.96 Japanese yen from 132.89 yen late Monday. The euro rose to $1.0647 from $1.0638.

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