GLOBAL MARKETS-Asia shares extend gains as economies slowly re-open, oil rallies

By Swati Pandey and Chibuike Oguh
SYDNEY/NEW YORK, April 29 (Reuters) - Asian shares rose for
a third session on the trot on Wednesday as investors took heart
from easing coronavirus lockdowns in some parts of the world
while oil prices jumped on hopes demand will pick up.
Risk assets including equities have rallied for most of this
month thanks to heavy doses of fiscal and monetary policy
stimulus around the globe aimed at softening the economic blow
from the COVID-19 pandemic.
Positive news around potential treatments for the infection
as well as progress in developing a vaccine have also boosted
sentiment recently.
Moreover, investors have regained some confidence as parts
of the United States, Europe and Australia are gradually easing
restrictions while New Zealand this week allowed some businesses
to open.
These factors helped lift MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS by 0.9% on
Wednesday, having rallied 3.3% already this week.
Japan's markets were closed for a public holiday.
Australian shares .AXJO rose 1.2% led by energy and
resources firms while South Korea .KS11 added 1.2%.
Chinese markets opened in the black with the blue-chip index
.CSI300 up 0.6%.
All the same, analysts were circumspect about the rally.
"The recovery in global share prices from the March lows has
not been accompanied by an expansion in market breadth," said
Jefferies analyst Sean Darby.
Darby said the number of stocks above their 260-day moving
average was still very low across emerging market and developed
market indexes while the number of stocks making new highs
versus new lows is about equal.
"Unlike turning points for markets and earnings at the
bottom, there is no clear evidence on how the technical picture
should evolve. The current rally suggests that conviction levels
are low in our view," Darby added.
The equity gains have come even as analysts predict a sharp
contraction in world growth.
Moody's expects economies of the group of 20 advanced
nations (G-20) to shrink 5.8% this year with momentum unlikely
to recover to pre-coronavirus levels even in 2021.
Markets were next looking for any guidance from the U.S.
Federal Reserve, which is due to issue a policy statement at the
close of its two-day meeting on Wednesday. The European Central
Bank meets on Thursday. Analysts said it was unlikely the Fed would make further
major policy moves, given the scope and depth of its efforts to
counter the economic damage caused by the coronavirus.
On Wall Street overnight, investors dumped tech giants
despite an earnings beat from Alphabet Inc's Google GOOGL.O ,
driving all three major U.S. stock indexes into the red.
The Dow Jones Industrial Average .DJI fell 0.3%, the S&P
500 .SPX lost 0.5% and the tech-heavy Nasdaq Composite .IXIC
dropped 1.4%.
Investors are now watching out for the other major tech
firms - Facebook FB.O , Amazon AMZN.O and Apple AAPL.O .
"There was a big sector rotation as money left high value,
growth sectors in tech like Amazon and went to value and
cyclical sectors like energy, industrial, financials," said Tim
Ghriskey, chief investment strategist at Inverness Counsel in
New York.
In currencies, the dollar weakened against the Japanese yen
to 106.52 on concerns the coronavirus could spread further than
previously thought if businesses reopened prematurely. JPY=
The euro EUR= was up 0.3% at $1.0848 though the euro index
=EUR eased after Fitch cut Italy's credit rating to BBB-, just
one notch above "junk" status.
The dollar index =USD against a basket of currencies fell
0.2%.
In commodities, U.S. crude CLc1 jumped 15.7% to $14.29 per
barrel, and Brent LCOc1 was up 4% at $21.28 after U.S.
stockpiles rose less than expected. O/R
U.S. crude was trading above $50 a barrel just in February.
Gold was a touch higher at $1,710.61 an ounce. XAU=

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