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Investors Shift Focus to Global Revival as Asia Bull Zone Nears

Asia Stocks March Toward Bull Zone on Hopes for Economy Recovery

(Bloomberg) -- Earnings uncertainty? Too passe. Asia investors have shifted their focus to the economic revival.

Traders flocked to riskier assets Friday, sending the MSCI Asia Pacific Index up as much as 2.3% to a level about a point away from entering a technical bull market. The gauge pared gains slightly to 1.9% in the afternoon. Their optimism was fueled by hopes for a speedy economic recovery after some bright spots from the latest Chinese data and a U.S. plan to reopen for business.

“All eyes are on the future,” said Banny Lam, managing director at CEB International Capital Corp. Investors are looking past the earnings season -- “which will be bad anyway” -- and are betting on a faster-than-expected pickup in global economic activity, he said.

Investors Shift Focus to Global Revival as Asia Bull Zone Nears

Many traders have made peace with China’s first economic contraction in decades and found relief in the fact that the 1.1% drop in the country’s industrial output in March came in much better than expected. And Fidelity International’s Lynda Zhou read the decline of only 3.9% in disposable income as the “positive side.”

“Most of the activities recovered quickly in March,” the portfolio manager wrote in emailed comments. “I expect a strong recovery in the second quarter. Going forward, we will continue to see structural improvements in GDP composition, with consumption taking a much bigger part, while trade will be relatively less important.”

All of the region’s markets traded in the green as of 2:13 p.m. in Hong Kong, with equity gauges for the Philippines, South Korea and Hong Kong leading the rally. Technology and material companies posted the best gains by sector. The MSCI Asia Pacific Index has rebounded 6% this month, on track to register its best month since January 2019.

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