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Asian Markets Continue to Rally for a Second Week, While Upcoming Bankers Meeting Looms

August 24, 2020

Asian
President Donald Trump and Federal Reserve chief Jerome Powell

Asian markets rose again Monday, tracking another record on Wall Street as the US appeared to ease up on its anti-China rhetoric, while investors turned their attention to a meeting of central bankers later in the week.

Gains were led mostly by Hong Kong, boosted by tech giant Tencent after reports said that Washington is looking to reassure U.S firms they can still do business with the company’s WeChat messaging app in China, despite a crackdown on the service at home.

Donald Trump’s decision this month to impose heavy restrictions against WeChat and TikTok, citing security concerns, escalated tensions between the two superpowers that have already been strained by various issues including coronavirus and Hong Kong.

The reports helped push the tech-heavy Nasdaq to yet another record on Friday, while the broader S&P 500 also reached a new high.

Hong Kong led gains across Asia, rallying 1.7 percent with investors also buoyed by a promise from China’s banking regulator that it would continue to back the city as a financial hub after concerns were raised following the imposition of a new security law last month. Shanghai put on 0.4 percent and Tokyo added 0.3 percent. Seoul piled on more than one percent and Taipei gained 0.5 percent. Sydney, Singapore, and Wellington were also in positive territory.

Buying was also handed a huge boost by the news that Trump had expanded the use of a coronavirus treatment using plasma from people who had recovered from the disease.

“Not the COVID-19 cure all the world is hoping for, but it is another positive step to help patient recovery time and get people back on their feet quicker,” said AxiCorp’s Stephen Innes.

Traders will also be keeping an eye on this week’s virtual gathering of central bankers, Usually held at Jackson Hole, Wyoming ( U.S ) hoping for some guidance on their plans for monetary policy after they provided a wall of cash to support the global economy — and stock markets — during the crisis.

All eyes will be on the main event though, which is a speech by Federal Reserve chief Jerome Powell that is due to take place on Thursday.

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