ASIAN shares advanced Tuesday across the board as buying set in after the lull of a US national holiday.
In the Philippines, the stock index rose 2.04 percent or 126.37 points to close Tuesday’s trading at 6,309.99.
Analysts said the optimism may be driven by expectations the US may decide to cut Chinese tariffs, a welcome move that would also help tame inflation.
China’s Commerce Ministry said Tuesday that Vice Premier Liu He spoke with Treasury Secretary Janet Yellen about coordinating economic policy between the two biggest economies and maintaining the stability of supply chains.
In a statement, it also said the Chinese side “expressed its concern over issues such as the removal of additional tariffs and sanctions imposed by the United States on China and fair treatment of Chinese companies.” The two sides agreed to continue their discussions, it said.
Investors also have been encouraged by the lifting of restrictions related to the coronavirus pandemic across the region, including in Japan, which had been booming with tourists from abroad ahead of the pandemic.
“The quiet economic calendar yesterday brings sentiments to focus on the single relief headline of a potential US tariff-easing decision, which could run the risks of a sharp paring back in speculative bullish bets in the event of any inaction,” in taming inflation,” Yeap Jun Rong, a market strategist at IG in Singapore, said in a commentary.
But risks remain because of inflation and slowing economic activity in some countries. A resurgence in Covid-19 infections in Europe, the US and parts of Asia is also looming, bringing the threat of a reversion to pandemic precautions.
Global investors have been worried about surging inflation and the possibility that higher interest rates could bring on a recession in some economies. US trading was closed Monday for Independence Day.
The risk of a recession is simmering as the US Federal Reserve aggressively hikes interest rates. The Fed is raising rates to purposefully slow economic growth to help cool inflation, but could potentially go too far and bring on a recession. (AP)