LONDON—Global shares moved into positive territory on Tuesday while oil prices firmed following China’s decision to ease some quarantine requirements for international arrivals.
China slashed the quarantine time for inbound travelers by half in a major easing of one of the world’s strictest COVID-19 curbs, which have deterred travel in and out of the country since 2020.
Asian shares rose after the announcement and European stocks opened firmly in the green which sent the MSCI’s benchmark for global stocks into positive territory and on track for its fourth consecutive daily gain.
China’s strict zero-COVID regulations have been a drag on activity in the world’s number two economy, but an easing of travel restrictions and reopening of major cities from lockdowns boost optimism that growth can get back on track.
MSCI’s broadest index of Asia-Pacific shares rose 0.3 percent, while Hong Kong’s Hang Seng reversed earlier losses to rise 0.7 percent and China’s CSI 300 Index gained over 1 percent. China’s tourism stocks gained over 5.5 percent.
The pan-European STOXX 600 was up 0.6 percent, boosted by oil & gas and mining stocks but the outlook for developed market stocks remains challenging as central banks attempt to balance stubbornly high inflation with slowing growth.
“Equity markets will not be out of the woods until central banks shift their rhetoric to a less hawkish stance,” said Salman Baig, portfolio manager, cross asset solutions, at Unigestion
“Unfortunately for many investors, such a pivot will likely not happen until after the economy has slowed down sufficiently to bring inflation on a sustainably downward path.”
The European Central Bank’s Forum on Central Banking in Sintra continued on Tuesday with a focus on a speech from ECB President Christine Lagarde.
Lagarde said the ECB will move gradually when it begins raising rates but with the option to act decisively on any deterioration in medium-term inflation, especially if there are signs of a de-anchoring of inflation expectations.
Eurozone government bond yields held near their highs after Lagarde’s comments, with Germany’s 10-year yield, the benchmark for the bloc, up 8 basis points at 1.63 percent.
The euro was little changed against the dollar following Lagarde’s initial comments, while China’s offshore yuan rose 0.1 percent after Beijing’s measures to ease travel restrictions.
The dollar index, which measures the greenback against a basket of six currencies, was little changed at 103.97.
Oil prices swung higher after China eased quarantine rules.
U.S. crude rose 1.41 percent to $111.08 a barrel. Brent crude jumped 1.3 percent to $116.59 per barrel.
Gold was 0.2 percent higher with the spot price trading at $1,827 per ounce.
Bitcoin rose 0.8 percent, trading at $20,870 after falling as low as $17,588.88 earlier this month.
