Asian markets mixed after rally, eyes on second wave

HONG KONG (AFP): Equities fluctuated Wednesday (June 24) in Asia after a healthy run-up the day before as traders weigh positive data suggesting economies are recovering against signs of a second wave of infections and the reintroduction of some lockdowns.

While governments and central banks have provided a wall of cash to support markets, investors are walking a tightrope between hopes the easing of restrictions will lead to a rebound and the possibility that looser measures will inflame the pandemic again.

After a rally across most regional bourses Tuesday, Wall Street and Europe followed suit after figures pointed to a big improvement in eurozone private-sector activity in June as well as a jump in US new home sales.

Meanwhile, several countries continued to loosen up, including in Britain where pubs, restaurants, hotels and cinemas were told they could open again from July 4.

"Through the lens of survey data, at least for now, the world's essential economies are seeing a V-shaped and coordinated rebound that looks set to (continue) through the summer in the northern hemisphere," said Stephen Innes at AxiCorp.

"Fingers crossed a second wave super spread does not land in our lap."

However, there are growing concerns of a relapse in some countries that had been opening up, with Germany reimposing containment measures in two western districts -- home to almost 640,000 people -- after an outbreak at a slaughterhouse infected more than 1,500 workers.

Portugal has also announced new restrictions in and around Lisbon.

And leading US health officials headed by top infectious disease expert Anthony Fauci warned of "historic" challenges, adding: "Covid-19 activity will likely continue for some time".

In morning trade, Hong Kong and Sydney were 0.1 per cent down, while Singapore and Manila dipped 0.2 per cent.

But Tokyo was up 0.1 per cent by lunch, while Jakarta jumped more than one per cent and Taipei put on 0.4 per cent and Wellington rose 0.7 per cent.

Seoul climbed 1.5 per cent with help coming from a report that North Korean leader Kim Jong-un has suspended plans for military action against the South in an apparent easing of tensions just over a week after Pyongyang blew up a liaison office.

While equities have been on an upward trajectory, gold -- a key safe haven in times of uncertainty -- has also been on the up as the relatively weak dollar makes it cheaper to buy, while investors are also keeping an eye on a fall-back in case the crisis erupts again.

The yellow metal is up around 17 per cent since the end of December and sitting at a seven-and-a-half-year high of $1,775. -AFP

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