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Asian Stocks Up on Improving Recovery Hopes, but Tempered by Rising U.S-China Tens

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imageStock Markets9 hours ago (May 27, 2020 10:45PM ET)

(C) Reuters.

By Gina Lee – Asian stocks were mostly up on Thursday morning, with investors juggling optimism over a global recovery from COVID-19’s economic impact with simmering U.S.-China tensions.

Countries that have loosened months-long lockdown measures are restarting their economies, with New York City and the United Kingdom set to loosen their lockdowns in June.

Meanwhile, China’s proposed national security laws for Hong Kong and Macau re-ignited protests in the city and ratcheted up the tension between the two countries.

Hong Kong’s Hang Seng Index slipped 0.31% by 10:35 PM ET (3:35 AM GMT) with investors spooked by U.S. Secretary of State Mike Pompeo’s Wednesday announcement that the city was no longer autonomous from China. The remarks puts Hong Kong’s special trading status with the U.S., as well as its future as a financial hub, at risk.

Meanwhile, investors are also waiting to see what the U.S. reaction, to be unveiled by President Donald Trump by the end of week, is.

China’s Shanghai Composite was up 0.43% while the Shenzhen Component was up 0.24%, reversing its earlier losses. The country will wrap up its week-long National People’s Congress later in the day.

Japan’s Nikkei 225 rose 2.06%.

South Korea’s KOSPI gained 0.71%. The country recorded 79 new COVID-19 cases in the last 24 hours, the highest number since April.

The Bank of Korea also cut its key interest rate earlier in the day, with the seven-day repurchase rate cut by 25 basis points to 0.5%.This is the central bank’s second cut since the COVID-19 outbreak, after it lowered rates by 50 basis points during an emergency meeting in March.

Down Under, the ASX 200 rose 2.21%. Reserve Bank of Australia Governor Philip Lowe told a parliamentary committee that “it is possible that the economic downturn will not be severe as earlier thought.” Australian employment fell 15% year-on-year in June, compared to a 20% estimate, as jobs slowly returned to the industries impacted by COVID-19.

But Lowe reiterated that the economic outlook remains “incredibly uncertain”.

Asian Stocks Up on Recovery Hopes, But Tempered by Rising U.S-China Tensions

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