By Gina Lee
Investing.com – Asia Pacific stocks were up on Monday morning in Asia, starting the week on a positive note in the region over the signing of the world’s largest regional free-trade agreement.
Fifteen countries signed the Regional Comprehensive Economic Partnership trade deal on Sunday, the final day of the 37th Asean Summit which was hosted by Vietnam virtually due to the COVID-19 virus.
The countries include China, Japan South Korea, Australia, New Zealand. and the ten 10 members of the Association of Southeast Asian Nations, together encompassing nearly a third of the world’s population and gross domestic product, or 2.2 billion people with a combined GDP of $26.2 trillion.
“(The) agreement ... signals that Asia keeps pushing ahead with trade liberalization even as other regions have become more skeptical,” HSBC economists Frederic Neumann and Shanella Rajanayagam said in a note.
“As such, it may reinforce a trend that’s been already underway for decades: that the global center of economic gravity keeps pushing relentlessly to the East,” the note added.
India was conspicuously missing from the list of countries. However, the deal raided hopes for the recovery of trade hit by U.S.-China tensions.
However, recent moves by U.S. President Donald Trump have increased U.S.-China tensions, with more moves such as sanctions or trade restrictions against even more Chinese companies, government entities or officials reportedly under consideration.
China’s Shanghai Composite gained 0.77% by 11:6 PM ET (3:16 AM GMT) and the Shenzhen Component was up 0.24%. Data released earlier in the day showed that China’s industrial production rose 6.9% year-on-year in October, above the 6.5% growth in forecasts prepared by Investing.com but remaining on par with September’s reading.
Meanwhiles retail sales grew 4.3% year-on-year in October, down from the forecast 4.9% but up from September’s growth of 3.3%. The unemployment rate fell to 5.3% from September’s 5.4%.
Hong Kong’s Hang Seng Index was up 0.63%.
In Australia, the ASX 200 gained 1.23%. The bourse saw a short pause in trading shortly after its market open, with market data issues currently under investigation by the operator.
Japan’s Nikkei 225 rose 1.81% and South Korea’s KOSPI soared 1.96%.
Global stocks rebounded back to pre-COVID-19 highs over hopes that a vaccine would become available soon. However, the ever-increasing numbers of COVID-19 cases worldwide tempered that enthusiasm.
The number of global COVID-19 cases passed the 54 million mark as of Nov. 16, with over 11 million cases in the U.S. alone. Germany must live with “considerable restrictions” against the spread of Covid-19 for at least the next four to five months, the country’s economy minister Peter Altmaier warned on Sunday.
Some investors remained positive despite the numbers.
“We do see a positive stream of news going forward … the market is looking forward towards eventual reopenings, real yields probably bottoming out, and cyclical and value stocks doing better, I think that’s a momentum that will be carried through at least over the next 3 to 6 months if not longer,” Sage Capital Pty chief investment officer Sean Fenton told Bloomberg.